Trusts
SARS now requires trusts to submit IT3(t) reports containing information about any amount vested in a beneficiary (distributions) of a trust, including income, capital gains and capital amounts between 1 March 2023 and 28 February 2024 by 31 May 2024 and subsequent years.
In order to complete the IT3(t) the financial statements for the trust will need to be finalised as these determine the actual distributions in the year. However, supporting documentation required for the preparation of the financial statements will not have been received from the financial institutions, making it practically impossible for the trustees to meet their reporting obligations to SARS by 31 May.
Controlling Bodies such as The South African Institute of Chartered Accountants (SAICA) have made representations to SARS highlighting their concerns but, as things currently stand, the deadline of 31 May remains.
Public Benefit Organisations
All PBOs that issue section 18A tax deduction certificates will be required to submit bi-annual reports to SARS. The first submission will be for the period 1 March 2023 to 31 August 2023 and will be due by 31 October 2023. The second submission will cover the period 1 September 2023 to 28 February 2024 and will be due by 31 May 2024.
Changes to 18A tax certificates
With effect from 1 March 2023, more detailed information about donors is required to be declared on the 18A tax certificates.
Until the end of February 2023, all that was required for a valid Section 18A certificate was: the name, reference number, address and contact details of the PBO; details of the donation (date of receipt, amount and nature of donation if not made in cash); name and address of the donor; and confirmation that the donation would be used exclusively for qualifying public benefit activities, such as education, welfare and health care.
From 1 March 2023, the certificate must also include:
- Donor nature (natural person, company, trust);
- Donor identification type and country of issue (in case of a natural person);
- Identification or registration number of the donor;
- Income tax reference number of the donor (if available);
- Contact number of the donor;
- Email address of the donor;
- A unique receipt number; and
- Trading name of the donor (if different from the registered name).
The additional information is presumably required to promote transparency and prevent abuse.
Failure to comply with section 18A of the Income Tax Act could result in negative consequences, including that the donor may not be able to claim a deduction, or punitive consequences for the PBO itself. It is thus important that PBOs understand the requirements of section 18A before issuing 18A certificates to donors.
Contact your
local Moore firm for assistance.