RVN Chartered Accountants Incorporated

Trusts and PBO 3rd party reporting

It is important to prepare yourself for the new SARS requirements.  SARS will now require third-party data from Trusts and Public Benefit Organisations.

Currently, banks, financial institutions, medical schemes, attorneys, estate agents, and issuers of bonds, debentures, and financial products are required to file third-party returns to SARS.  The third-party returns, containing information about a taxpayer’s interest, dividends, or capital gains on disposals in the year of assessment, are filed with SARS once a year following the end of the assessment year. These returns provide details about the income that the taxpayer earned during that period.

Previously, Trust distributions were not required to be reported to SARS as third-party data, but this has now changed. This year, Trusts will have to submit third-party data (list below) by September 2023. Thereafter, SARS will require that Trusts submit third-party data on an annual basis on an IT3(t).

SARS proposes to use the ITR12T and IT3(t) processes simultaneously, and eventually merge them into a single linked beneficiary system.  The reporting individuals, often tax practitioners, serve as the representative taxpayers for resident trusts and are responsible for providing the aforementioned information.

Information that will be required to be submitted on the IT3(t):

  • Demographic information of the reporting Trust
  • Demographic information of Trust Persons / Beneficiaries
  • Taxable amounts distributed/vested in Trust Persons / Beneficiaries
  • Details of non-taxable income distributed
  • Trust financial flows.

 

Approved section 18A institutions to declare details of donations through the new IT3(d) certificates

SARS emphasised the need to have approved section 18A institutions file the new IT3(d) certificates with information on donors and donation amounts. This is because there have been various cases of abuse of the system, including misuse of PBO registration numbers and instances where section 18A receipts were used for fake donations, non-existent PBOs, or entities not approved as PBOs. The new reporting system ensures greater transparency and integrity in the section 18A donor deduction process.

According to the Government Gazette no.48104, notice 3082, Public Benefit Organisations must now disclose the following additional information on the s18A certificate for it to be valid, according to s18A(2)(vii).

The following further information must be included on a receipt issued in terms of section 18A(2)(a) of the Income Tax Act:

2.1 Donor nature of person (natural person, company, Trust, etc.);

2.2 Donor’s identification type and country of issue (in case of a natural person);

2.3 Identification or registration number of the donor;

2.4 Income tax reference number of the donor (if available);

2.5 Contact number of the donor;

2.6 Electronic mail address of the donor;

2.7 A unique receipt number; and

2.8 Trading name of the donor (if different from the registered name).

Further reading: https://www.sars.gov.za/businesses-and-employers/third-party-data-submission-platform/

While every reasonable effort is taken to ensure the accuracy and soundness of the contents of this publication, neither writers of articles nor the publisher will bear any responsibility for the consequences of any actions based on information or recommendations contained herein.  Our material is for informational purposes and should not be construed as financial advice.

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