A donation is deductible only where it is made to an organisation approved by SARS for Section 18A purposes, only where you hold a valid Section 18A receipt, and only up to 10% of your taxable income before the donation. Anything above the limit can generally be carried forward. Most business giving fails this test — not because the cause was wrong, but because the receipt was never issued, or was issued by an organisation that is not 18A approved.
Giving money away and getting no deduction for it is the most avoidable tax outcome there is.
The three conditions
All three must hold. Missing any one means no deduction.
| Condition | What it means |
|---|---|
| The recipient is approved for Section 18A | Not merely a registered NPO or an NPC — specifically approved by SARS to issue 18A receipts |
| You hold a valid Section 18A receipt | With every required field, including your own tax reference number |
| The amount is within 10% of taxable income | Calculated before the donation deduction |
The first is where most donations fail, because the labels look interchangeable and are not.
Not every good cause is Section 18A approved
This is the point worth internalising before you give.
NPO registration with the Department of Social Development, incorporation as an NPC at CIPC, and PBO approval by SARS are three different things — and none of them automatically means an organisation may issue Section 18A receipts. That is a further, separate approval.
A genuine, well-run charity doing excellent work may not be 18A approved. Your donation is still worth making; it is simply not deductible.
Ask before you donate. A single question — "are you approved for Section 18A, and what is your PBO reference number?" — takes seconds and decides whether the donation costs you the full amount or a proportion of it.
See what is a non-profit company (NPC) and the new Section 18A receipt rules.
What the receipt must show
From 1 March 2026 the requirements tightened, and a receipt on the old template may not be valid.
Broadly, expect a valid receipt to reflect:
The organisation's name and PBO reference number, and confirmation it is approved to issue 18A receipts
A unique receipt number
The date the donation was received
The amount, or for a donation in kind a detailed description and market value
Your name, and the nature of the donor — company, natural person, trust
Your identity or registration number
Your tax reference number
A statement that the receipt is issued under Section 18A and the donation will be used exclusively for the approved purpose
Two practical points.
Give them your tax number at the time of donating. They now need it, both for the receipt and for their IT3(d) submission to SARS. Withholding it means the receipt cannot be completed properly.
Check the receipt when it arrives rather than filing it unread. A receipt missing a required field is a deduction you will lose at exactly the moment you need it — in a verification, two years later. See IT3(d) donor reporting.
How the 10% limit works
The deduction is limited to 10% of taxable income, calculated before deducting the donation itself.
A worked example. Your company has taxable income of R1,200,000 before donations and gave R180,000 to an approved organisation.
| Taxable income before the donation | R1,200,000 |
| 10% limit | R120,000 |
| Donation made | R180,000 |
| Deductible this year | R120,000 |
| Carried forward | R60,000 |
The excess is generally carried forward and treated as a donation in the following year, subject to that year's limit.
Two things follow.
A loss-making company gets little or no deduction, because 10% of a low or negative taxable income is a low or negative number. Timing a large donation into a profitable year is legitimate planning.
The limit is per year, so a very large one-off donation may take several years to absorb. Where the amounts are significant, spreading it deliberately is worth modelling.
What is not deductible
Sponsorship where you receive a benefit. If your logo goes on the shirts and you receive advertising value, that is not a donation — it may well be deductible as advertising, which is a different provision with different requirements, but it is not an 18A matter. An organisation that issues you an 18A receipt for sponsorship has created a problem for both of you.
A donation to an organisation without 18A approval. However worthy.
A donation with no valid receipt. The receipt is the substantiation. Without it there is no claim.
Buying a table at a fundraising dinner, to the extent you received value — a meal, entertainment, tickets. Only the portion representing a genuine donation can qualify.
Giving to an individual. However deserving, a payment to a person is not a Section 18A donation.
Political donations. Not deductible under Section 18A.
See what business expenses are tax deductible and the expenses SARS most often disallows.
What about B-BBEE?
Donations frequently serve two purposes at once, and the requirements are not the same.
Socio-economic development contributions count on your B-BBEE scorecard, and the qualifying criteria are set by the B-BBEE codes — which are not the same as the Section 18A requirements.
A donation can qualify for one and not the other. An SED contribution to a beneficiary that is not 18A approved earns scorecard points and no tax deduction. A donation to an 18A-approved organisation whose beneficiaries do not meet the SED criteria does the reverse.
Where you are giving for both reasons, check both sets of requirements before you pay. See EME or QSE: how your turnover sets your B-BBEE obligation and what is a B-BBEE affidavit.
Donations in kind
Deductible, and the substantiation requirement is higher.
You need a detailed description and a market value — enough that somebody else could identify what was given and arrive at a similar figure. Quantity, nature, condition, age.
Support the valuation. A quotation for equivalent goods, an independent valuation, a supplier invoice, or comparable market pricing.
Be conservative. An overstated in-kind valuation is the single most likely thing to attract attention to both you and the recipient organisation.
And check the trading stock position. Donating your own trading stock has its own tax treatment, which is not simply "claim the market value" — take advice where the amounts are meaningful.
Frequently asked questions
Are donations tax deductible in South Africa? Only where made to an organisation approved by SARS for Section 18A purposes, supported by a valid Section 18A receipt, and limited to 10% of taxable income calculated before the donation.
Is every registered NPO able to issue a Section 18A receipt? No. NPO registration, NPC incorporation and PBO approval are three separate things, and none of them automatically confers Section 18A approval. Ask for the PBO reference number before donating.
What is the 10% donation limit? The deduction is capped at 10% of taxable income calculated before deducting the donation. Amounts above the limit are generally carried forward to the following year.
Can I claim a donation without a receipt? No. The Section 18A receipt is the substantiation, and a receipt missing a required field is a deduction you will lose in a verification.
Is sponsorship a tax-deductible donation? Not as a donation, where you receive a benefit such as advertising. It may be deductible as a business expense under a different provision, but it is not a Section 18A matter — and an organisation issuing an 18A receipt for sponsorship has created a problem.
Do I have to give the charity my tax number? In practice yes. Since 1 March 2026 the donor's tax reference number is among the required receipt details, and it is also what the organisation needs for its IT3(d) submission to SARS.
Do donations count for B-BBEE as well as tax? They can, but the requirements differ. Socio-economic development criteria under the B-BBEE codes are not the same as Section 18A approval, and a donation can qualify for one without the other.
Are donations in kind deductible? Yes, with a detailed description and a supported market value. Be conservative — an overstated valuation attracts attention to both parties.
Ask one question before you give
"Are you approved for Section 18A, and what is your PBO number?" That single question, asked before the money moves, is the difference between a donation that costs you the full amount and one that does not.
Smartbook tracks donations and Section 18A receipts through the year, checks the 10% limit against actual taxable income before year end, and flags where a large donation should be timed or spread.
See monthly accounting plans →
Company tax returns from R250 →
Last reviewed: 28 August 2026. Written by the Smartbook team — SAIPA and SAICA accredited, SARS registered tax practitioners. Section 18A requirements were amended with effect from 1 March 2026 and change from time to time — confirm the current position with SARS. Donations of trading stock and large in-kind donations have specific treatment; take advice where the amounts are material. General guidance, not advice on your circumstances.
Primary sources: SARS — Tax Exempt Institutions · Income Tax Act 58 of 1962, Section 18A · the dtic — B-BBEE Codes of Good Practice · Department of Social Development — NPO Directorate