2015 / 2016 Income Tax Guide

Chapter 6: SPECIAL DEDUCTIONS

6.19 DONATIONS TO PUBLIC BENEFIT ORGANISATIONS & DEEMED                         DEDUCTIBLE DONATIONS - section 18A

Notes

1. The donation deduction is available to all taxpayers (individuals, trusts, companies and close corporations.

2. The deduction is limited to an amount which does not exceed 10% of the taxable income of the taxpayer before the deductions under this section and section 18 (medical) - and excluding any taxable income from any retirement lump sum benefit or severance benefit.

3. A deduction is only allowed if the donation is made to an organisation listed in Part II of the Ninth Schedule.

4.  Any amount donated over the "deductible" limit is not carried forward for the 2014 tax year. It falls away. However, for years of assessment starting on or after 1 March 2014, any donations in excess of the 10% may be carried forward and treated as a donation in the next year.

5. Since the s 18A deduction is based on 10% of the taxable income, if the taxpayer has no taxable income or has an assessed loss, no s 18A deduction may claimed for that year.

6.  The s 18A deduction is claimed after the inclusion of taxable allowances and any taxable capital gain.

     See Chapter 8 for the order in which an individual must claim deductions and for an example.