New SARS Rules on Section 18As for South African NPOs

New SARS Rules on Section 18As

Effective from March 1, 2023, PBOs must collate all Section 18A tax certificates issued to donors throughout the financial year (March 2023 to February 2024) and submit this data to SARS using the prescribed IT3(d) form by May 31, 2024. Even if a PBO has not issued any Section 18A certificates during this period, they must still submit a nil declaration.

Failure to comply with this requirement could jeopardise the PBO's Section 18A approved status, which would prevent donors from claiming tax deductions on their donations going forward. This new regulation underscores the importance of meticulous record-keeping and a streamlined submission process for NPOs.

To assist PBOs in meeting these new requirements, SARS has provided three options for submitting the IT3(d) data:

1.  eFiling: For PBOs that have issued 50 or fewer Section 18A certificates throughout the financial year, the details of each certificate can be submitted directly through the SARS eFiling platform.
   
   
2. HTTPS Secure Gateway: If a PBO has issued more than 50 Section 18A certificates, they must first register as a third-party data provider with SARS. The PBO will then need to convert their Section 18A certificates into the prescribed IT3(d) format and upload this file via the SARS secure HTTPS gateway.
   
   
3.  Connect:Direct: Similar to the HTTPS option, PBOs with more than 50 certificates must register as third-party data providers and convert their data to the IT3(d) format. However, instead of using the web-based upload, they can submit the file directly to SARS using the Connect:Direct software.

Navigating these submission options and ensuring accurate data conversion can be a daunting task for many PBOs, especially those with limited resources or technical expertise. This is where ActiveDonor, a cloud-based donor management and receipting platform designed specifically for South African nonprofits, can provide a valuable solution.

ActiveDonor: A Streamlined Solution

ActiveDonor, the leading cloud-based donor management and receipting platform for South African NPOs, has developed a new feature that will allow direct IT3(d) submissions to SARS from our platform.

With ActiveDonor's user-friendly interface and automated processes, NPOs can streamline their donor management, receipting, and Section 18A certificate issuance, all while ensuring compliance with SARS regulations. The upcoming IT3(d) submission feature will further enhance ActiveDonor's capabilities, providing a comprehensive and hassle-free solution for nonprofits to maintain their tax-compliant status and protect their donors' ability to claim tax deductions.

As the deadline for IT3(d) submissions approaches, nonprofits should explore their options and consider leveraging tools like ActiveDonor to streamline their processes, ensure compliance, and maintain the trust and support of their donors.

Benefits of Using ActiveDonor

• Streamlined Compliance: ActiveDonor simplifies the entire process by allowing you to generate professional Section 18A certificates, send them to donors, securely file them, and seamlessly submit the required IT3(d) data to SARS when needed.
  
  
• Time-Saving Automation: Say goodbye to manual data entry and complicated file uploads. ActiveDonor's automated submissions save you valuable time and resources.
  
  
• Increased Accuracy: Minimise the risk of human error with ActiveDonor's automated and secure submission processes, ensuring your data is accurate and compliant.
  
  
• Cost-Effective Solution: Avoid the expense of outsourcing IT3(d) submissions by leveraging ActiveDonor's integrated platform designed specifically for South African NPOs.
  
  
• Donor Trust and Transparency: Meet compliance deadlines with ease and maintain transparency with your donors, fostering trust and strengthening relationships.
  
  
• Centralised Data Management: Keep all donor information, receipts, and Section 18A certificates securely stored in one centralized location within ActiveDonor's platform.

Implications for Donors and Tax Deductions

Compliance with section 18A guidelines is essential for maintaining strong relationships with your donors. By ensuring your donors receive their section 18A certificates promptly, you enable them to claim tax deductions and build trust with your organization.

As the deadline for IT3(d) submissions approaches, PBOs should explore their options and consider leveraging tools like ActiveDonor to streamline their processes, ensure compliance, and maintain the trust and support of their donors.

Ready to simplify your SARS compliance?

Sign up for ActiveDonor's IT3(d) submission waitlist to be notified when this new feature launches.