2015 / 2016 Income Tax Guide

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Chapter 6: SPECIAL DEDUCTIONS

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

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Notes

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

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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.

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

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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.

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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.

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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.

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