This year will mark the first time that Section 18A PBO’s are required to participate in third party data reporting through the submissions of the IT3(d) tax certificates to SARS. All S18A approved PBO’s that have issued S18A tax deductible receipts to their donors between 01 March 2023 and 29 February 2024 will be liable for this reporting. If a PBO has not issued any S18A receipts for this period, they must submit a NIL IT3(d) declaration to SARS. The deadline for these submissions is 31st May 2024.

IT3 reporting refers to what is known as “third party data reporting” and involves third parties such as banks, medical aid schemes, employers, and fund administrators who by law, must send to SARS certain prescribed data called “third party data”. This data is usually sent to SARS in the format of tax certificates which SARS in turn uses in their assessment of various taxpayers. There are different types of tax certificates that are submitted to SARS depending on the third party. Medical aid schemes will submit medical aid tax certificates, fund administrators will submit IT3(b), IT3(c) and IT3(s) tax certificates and employers will submit IRP5 tax certificates. Section 18A approved PBO’s have now been added to the list of third parties required to submit third party data to SARS through the submission of IT3(d) tax certificates.

The following section 18A entities are required to submit information to SARS: government, government institutions, public benefit organisations and United Nations agencies.

In addition to setting up the profile for registration of IT3 third party data submissions, S18A approved organisations are encouraged to address data quality issues with donors as and when these arise and should engage with donors if incorrect or incomplete data is provided. Ultimately, taxpayers wishing to benefit from this tax deduction will also need to take responsibility to ensure that the correct details are provided when requesting a S18A receipt. The S18A receipts should not be issued without all the relevant information having been provided by the donor. During SARS’ pilot phase in 2021/22, it was noted that taxpayers were eager to provide the correct details once they understood the implications to their S18A claims if incorrect data is provided.

Failure to comply puts their special S18A approval with SARS at risk as the PBO will no longer be SARS compliant. It is therefore essential for PBO’s to ensure that they understand the process, gather the required information, and make a timely submission of their IT3(d) tax certificates.