For Section 18A approved organisations in South Africa, January presents a critical window to get donation administration in order before the tax year end rush. With the SARS submission period of 1 March fast approaching, taking time now to verify your Section 18A receipts, reconcile donations, and prepare your IT3(d) submission can prevent compliance issues and protect your donors’ ability to claim a tax deduction.
This guide walks you through five essential tasks every PBO should prioritise in January to ensure SARS compliance and maintain donor confidence throughout the year.
1. Reconcile All Donation Income Before Your Tax Certificate Submission
Start by reconciling all donations received across every channel: bank transfers, debit orders, online platforms like payfast, and/or cash deposits. Ensure that your bank statements align with your donor records and accounting system. Any discrepancies should be investigated immediately, as errors here will flow through to your Section 18A certificates issued and your IT3(d) submission to SARS.
Clean reconciliation now makes tax year end reporting and audits far smoother, especially for organisations registered as NPOs, NPCs, or trusts. An auditor reviewing your Section 18A compliance will expect a clear trail from donation receipt to Section 18A certificate to SARS submission. PBOs and PBAs that qualify for 18A approval must demonstrate that every Section 18A receipt issued matches actual donations made to the organisation.
Taking time in January to reconcile ensures your organisation can issue accurate Section 18A receipts and meet SARS requirements without last minute stress.
2. Verify Donor Information for Accurate Section 18A Tax Certificates
January is an ideal time to review donor contact details and consent records. Check that you have accurate names, email addresses, and identification numbers where required for Section 18A receipts. The following information must appear on a Section 18A tax certificate: the donor’s full name, address, ID number or company registration number, and your organisation’s PBO reference number.
Ensure your donor database complies with POPIA: data should be up to date, securely stored, and only used for purposes donors have consented to. Incomplete or incorrect information can delay receipt issuance and damage your organisation’s credibility. When a taxpayer attempts to claim a tax deduction using a Section 18A certificate with errors, SARS may reject the deduction.
Accurate donor records are essential for both compliance with the requirements set by SARS and for maintaining the trust of donors who rely on your organisation to issue valid Section 18A receipts.
3. Prepare for Section 18A Receipt Issuing and Tax Deduction Compliance
If your organisation holds Section 18A approved status, begin preparing to issue Section 18A tax certificates now. Confirm that all qualifying donations are correctly categorised and that your 18A approval details are current. Under Section 18A of the Income Tax Act, only qualifying entities, public benefit organisations (PBOs) approved by the commissioner, can issue tax deductible receipts.
Remember that Section 18A tax certificates must include specific information prescribed by SARS, and errors can invalidate them for donors seeking to claim tax deductions. Many donors expect their Section 18A certificate well before the February deadline so they can reduce their taxable income when filing.
Use a compliant template to ensure every Section 18A receipt issued by your organisation contains all mandatory fields, including your PBO reference number and confirmation that no goods or services were provided in exchange for the charitable donation.
4. Review Donation Policies and Controls for SARS Compliance
Use January to review your internal donation handling policies. Are segregation of duties, approval processes, and record-keeping controls being followed consistently? Strong governance around Section 18A donations is not just good practice, it is increasingly expected by funders, banks, and regulators.
South African PBOs must demonstrate compliance with both SARS requirements and broader governance standards. This includes ensuring that only authorised staff can issue Section 18A receipts, that donation records are securely stored, and that your organisation can amend records if errors are discovered.
Updating procedures now helps mitigate fraud risk and demonstrates accountability. If your organisation uses multiple systems to track donations, consider consolidating into a single platform to improve transparency and ensure all s18a receipts are accurately recorded.
5. Thank and Acknowledge Donors While Staying Tax Certificate Compliant
Finally, don’t overlook donor stewardship. Ensure that all donors from the previous year have been properly acknowledged, whether through thank you emails, impact updates, or formal letters. Timely, sincere communication builds trust and sets the tone for ongoing support in the new year.
January acknowledgements feel intentional, a natural time to reflect on the accomplishments of the previous year while offering hope for the new. When you send Section 18A receipts to donors, consider including a personal note thanking them for their contribution to your public benefit activities.
One important compliance note: Every Section 18A tax certificate must confirm that no goods or services were exchanged for the donation. If benefits were provided, the deductible amount must be reduced accordingly. This ensures donors can legitimately claim a tax deduction without compliance issues arising later.
Key Takeaways: Section 18A Tax Certificate Compliance for South African PBOs
- Reconcile all donation income before preparing Section 18A certificates to ensure accuracy in your SARS submission
- Verify donor information including ID numbers, names, and addresses – errors can invalidate receipts and prevent tax deductions
- Confirm your Section 18A-approved organisation status is current before issuing any tax-deductible receipts
- Ensure Section 18A receipts include all mandatory information prescribed by the South African Revenue Service, including your PBO reference number
- Submit your IT3(d) to SARS by 31 May with accurate details of all Section 18A certificates issued to donors
- Review donation controls including segregation of duties and secure record-keeping to maintain SARS compliance
- Acknowledge donors promptly with both official Section 18A receipts and personal thank-you communications
Simplify Your Section 18A Tax Certificate Management with ActiveDonor
ActiveDonor is a leading cloud-based donor management and receipting platform designed specifically for South African PBOs and non-profits.
With ActiveDonor’s user-friendly interface and automated processes, your organisation can streamline donor management, generate compliant Section 18A certificates, and seamlessly submit the required IT3(d) data to SARS – all from one centralised platform.
Benefits of using ActiveDonor:
- Generate professional Section 18A tax certificates that meet all SARS requirements
- Send receipts directly to donors and securely file them in one location
- Automate your IT3(d) submission to eliminate manual data entry and reduce errors
- Maintain accurate, POPIA-compliant donor records year-round
- Improve transparency and reduce admin burden for your NPO
Ready to simplify your Section 18A compliance?
Book a free demo today!
