Who needs to submit the audit certificate?
- An approved organisation conducting a combination of Public Benefit Activities (PBA’s) from Part I and Part II of the Ninth Schedule
- A conduit Public Benefit Organisation (PBO) funding other PBO’s, institutions, boards or bodies organisation conducting a combination of PBA’s from Part I and Part II of the Ninth Schedule
Who is exempt?
- An approved organisation conducting only PBA’s from Part II of the Ninth Schedule
- A conduit PBO funding other PBO’s, institutions, boards or bodies organisation conducting only PBA’s from Part II of the Ninth Schedule
Why does an audit certificate need to be issued?
- An approved organisation is only allowed to issue a Section 18A (S18A) certificate only to the extent that the donation will be used to carry on PBA’s in terms of Part II of the Ninth Schedule.
- Accordingly there is a risk that those approved organisations that conduct activities in terms of Part I and Part II of the Ninth Schedule may be issuing S18A certificates incorrectly.
Who can the audit certificate be obtained from?
- The Income Tax Act does not prescribe who must issue an audit certificate.
- It is expected that the individual must be independent and suitably qualified.
- Typical individuals that can provide this service include:
- Auditor General
- Registered Auditor
- Independent Reviewer
When do I submit the audit certificate?
Only when SARS submits a request to an organisation after the income tax return has been submitted.
What is the implication of non-submission of an audit certificate?
A person who wilfully and without cause fails or neglects to submit a return or supporting documents to SARS (supporting documents includes the audit certificate) which is required to be submitted is guilty of an offence and on conviction is subject to a fine or imprisonment for a period not exceeding 2 years.
How long should I retain the certificate?
The audit certificate (either electronic or hardcopy) must be retained for 5 years from date of submission of the income tax return for the year of the assessment to which the certificate relates.
Related Section 18A guidance
For the approval rules, see SARS guidance on Section 18A approval. You can also read our update on proposed certificate requirements and explore IT3(d) reporting resources for related donation reporting.