SARS has now announced that the Third Party Data Annual Submissions process (for the period 1 March 2023 – 29 February 2024) will open on 1 April 2024 and close on 31 May 2024.

Are non-profit organisations affected and, if so, which ones?

SARS requires approved section 18A organisations to complete and file the new IT3(d) returns with information on:

• the donors to whom section 18A receipts have been issued; and
• the relevant donation amounts.

Why is this happening?

This requirement has been put in place because various abuses relating to tax-deductible donations have arisen in the past, including:

• misuse by taxpayers of the public benefit organisation’s (“PBO’s”) approval reference number; and
• claiming of a tax deduction against section 18A receipts when no donation had actually been made, when the PBO did not exist or when the entity was not approved as a PBO that could issue section 18A receipts.

The data collected will enable SARS to confirm whether a person reporting a section18A donation on their tax return has filed the correct information and will therefore assist SARS in determining the taxpayer’s tax liability. If this data is not uploaded by the recipient (beneficiary) organisation, it is likely that the taxpayer will not be able to claim the tax deduction.

What is the submission requirement?

Third-party returns must be filed with SARS twice a year, after the end of the individual year of assessment (note – not the organisation’s financial year end), and after 31 August. They will include details of donations made in that year by South African taxpayers to whom a section 18A receipt was issued. These new IT3(d) returns will be submitted to SARS using a submission channel related to the size of the submission.

What information is required on the IT3(d) return?

The information required (mostly drawn from the updated section 18A receipt format that we have previously advised you of) includes:

• Beneficiary’s physical and postal address details
• Donor’s:
  • Entity type
  • Surname/initial or registered name
  • Trading name (if applicable)
  • Income taxpayer reference number
  • Identification type
  • ID number (for individuals)
  • Passport number / country
  • Cell number
  • Contact email address
• Nature of the donation (cash or property-in-kind)
• Rand value (where cash)
• Date of payment / transfer of property

What are the next steps?

Up to 20 records can be submitted via e-filing; at the next level, up to 50 000 records can be submitted electronically via a file transfer protocol.
For our tax compliance clients, this means that, in order to prepare the submission, we will need all section 18A receipts for the tax period ended 29 February 2024 and also the IT3 tax type. For other organisations, please request assistance from your tax practitioners or users of your e-filing profile.