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South Africa: Submission of third-party returns by 18A public benefit organisations

24 July 2023
– 2 Minute Read
| Tax

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Overview

  • New obligations for public benefit organisations (PBOs) approved in terms of the South African Income Tax Act were introduced in the 2024 tax year.
  • With effect from 1 March 2023, all 18A certificates issued to donors to enable them to claim tax deductions, must contain more detailed information.
  • In addition, 18A PBOs must now submit third-party returns to SARS on a bi-annual basis. This should facilitate the pre-population of such information on donors’ income tax returns, making it easier for them to claim deductions.

New obligations for public benefit organisations (PBOs) approved in terms of section 18A of the Income Tax Act 1962 (18A PBOs and ITA respectively) were introduced in the 2024 tax year.

With effect from 1 March 2023, all 18A certificates issued to donors to enable them to claim tax deductions, must contain more detailed information (see our previous newsflash here).

In addition, 18A PBOs must now submit third-party returns to SARS on a bi-annual basis. This should facilitate the pre-population of such information on donors’ income tax returns, making it easier for them to claim deductions.

The return for the period:

  • 1 March to 31 August, is due by 31 October; and
  • 1 September to the last day of February, is due by 31 May.

This is subject to the proviso that SARS may agree for these returns to be submitted in respect of a different period, on an alternative date and in an alternative manner.

18A PBOs are phased into the new reporting obligations and are not required to submit third-party returns for 1 March 2023 to 31 August 2023. The first third-party return (form IT3(t)) is only due by 31 May 2024.

The third-party returns must be submitted electronically using the designated SARS electronic filing service and must contain the information reflected in the new, more detailed 18A certificates. Further information is in the SARS Business Requirement Specification Guide: IT3 Data Submission.

Although the new process will increase the compliance obligations of 18A PBOs, it will be much easier to implement for 18A PBOs if they ensure that all of their 18A certificates contain the new, detailed information, and that such information is retained in an easily accessible format.