Please advise if a donation of an asset made to the The Los Angeles-based AIDS Healthcare Foundation (AHF) NPO Swaziland branch is exempt from donations tax?
Important:
This answer is based on tax law year ending 28 February 2018.
Answer:
The relevant law is found in section 56(1)(h) of the Income Tax Act. It exempts from donations tax “the value of any property which is disposed of under a donation … to any person (including any sphere of government) referred to in section 10(1)(a), (cA), (cE), (cN), (cO), (cQ), (d) or (e).
Section 10(1)(cN) is the more likely one and refers to a public benefit organisation approved by SARS. Section 30 includes, as a public benefit organisation, any association of persons established in a country other than the RSA, but that is not really important. What is, is whether the organisation (the foundation) was approved by SARS. The taxpayer would be well advised to obtain confirmation thereof from the entity itself. Remember that the donor bears the onus of proof in this instance.