SARS Proposes New Certificate Requirements for Section 18A-Approved Organisations
SARS has published a draft notice that will affect organisations approved to issue Section 18A tax-deductible donation receipts.
The draft notice deals with the certificate that certain Section 18A-approved entities must obtain or submit each year to confirm that donations for which Section 18A receipts were issued were properly applied. This follows a recent amendment to section 18A(2B) of the Income Tax Act by the Tax Administration Laws Amendment Act 4 of 2026.
The practical message is simple: Section 18A-approved organisations will need stronger records, clearer controls and better evidence of how tax-deductible donations were applied.
What changed?
Previously, section 18A(2B) referred to an “audit certificate”. This created uncertainty in practice because the Income Tax Act did not clearly prescribe the exact format, content, or issuer of the certificate. SARS had previously issued guidance on this in Interpretation Note 112.
The new amendment replaces the wording “audit certificate” with “certificate”. More importantly, for public benefit organisations, institutions, boards or bodies falling under section 18A(2B), the certificate must now confirm the reasonable satisfaction of a registered tax practitioner.
This is a significant change. It means the certificate is no longer framed as an “audit certificate” in the traditional sense. The draft notice also makes it clear that the certificate is not intended to be an audit, review, or assurance engagement. Instead, it is an independent examination of the relevant Section 18A donation records and compliance requirements.
What does the draft SARS notice do?
The draft notice sets out the information that must be included in the certificate. This includes details of the Section 18A-approved entity, such as its name, address, income tax number, Section 18A approval reference number, date of approval, and the nature of its approval.
The certificate must also state the number of Section 18A receipts issued during the year and the total rand value of donations for which receipts were issued.
What must the person issuing the certificate confirm?
The person issuing the certificate must confirm that they performed an independent examination of the records and information relating to donations for which Section 18A receipts were issued.
The draft notice specifically states that the examination does not constitute an audit, review or assurance engagement and that no audit or assurance opinion is being expressed. The certificate must also confirm that the organisation:
- maintained proper donation records;
- had systems to identify donors;
- retained sufficient donor and receipt information for SARS third-party reporting; and
- had internal controls to ensure that Section 18A receipts were issued only for qualifying donations.
Use of donations remains the key issue
At the heart of the certificate is the requirement to confirm that Section 18A donations were used properly.
For “Doer” PBOs
For “Doer” PBOs carrying on both Part I and Part II of the Ninth Schedule activities, the certificate must confirm that donations for which Section 18A receipts were issued were used solely for public benefit activities listed in Part II of the Ninth Schedule and carried on in South Africa.
For Conduit PBOs
For Conduit PBOs, the certificate must confirm that the donations were used to provide funds or assets to recipient organisations that applied the funds solely for qualifying Part II public benefit activities.
It must also confirm that the PBO met the 50 per cent distribution requirement contemplated in section 18A(2A)(b)(i).
For government departments
For government departments, the certificate must confirm that donations were used solely for qualifying Part II public benefit activities.
Independence requirements
The draft notice also introduces important independence requirements for registered tax practitioners.
A registered tax practitioner issuing the certificate must be independent of the Section 18A-approved entity. The practitioner must not be an employee, trustee, director, member, office bearer, or involved in the governance or management of the entity.
The practitioner must also not have participated in the receipt, management, allocation or application of the donations being examined, and must have no personal or financial interest that could impair objectivity.
Practical impact for NPOs and PBOs
Section 18A-approved organisations should start preparing now.
The draft notice points to a more formal annual compliance process. Organisations will need proper Section 18A receipt registers, donor records, donation reconciliations, proof of how donations were applied, and clear controls over when Section 18A receipts may be issued.
The practical message is simple
Section 18A compliance has fundamentally changed, and merely issuing receipts is no longer enough to satisfy SARS. To protect your PBO status, your organisation must now actively demonstrate that all Section 18A donations are meticulously recorded, strictly controlled, and legally applied to approved activities.
Organisations should therefore ensure that robust Section 18A systems, donor records, receipt templates and IT3(d) reporting processes are in place.
Need help preparing your Section 18A records?
TPCSA can assist NPOs and PBOs with reviewing Section 18A records, donor information, donation reconciliations, receipt controls and IT3(d) reporting readiness.
Speak to TPCSA