Corporate Sponsorships ...
Tax-deductible corporate sponsorships such as contributing to or sponsoring one of the Rally to Read initiatives is a great opportunity for businesses. It provides you with a chance to help your community, connect with your clients, and saves you a little on tax too!
Tax-Deductible: Amount deductible from taxable income or the amount of tax to be paid.
Corporate Sponsorship: Where companies pay to be associated with a nonprofit or charitable event. Companies do this to align themselves with a meaningful initiative that matters to their business and ones that their clients care about too
Social Responsibility is the theory that every entity, corporate or individual, has an obligation to act to benefit society at large. Corporate sponsorships of non-profit organisations and charitable causes are your business’ social responsibility.
The good news is, that when your business contributes to charitable acts, it may, in addition to creating a feeling of well-being, qualify for a tax deduction.
The South African Government decreed that when companies donate to organisations that are established to carry out activities for public benefit, these donations will qualify for a tax deduction.
Rally to Read holds rallies every year where groups of people travel through rural communities in South Africa, delivering training and educational materials to communities in need. Participating or sponsoring the Rally to Read is a tax-deductible corporate sponsorship.
Tax-deductible corporate sponsorships are carefully managed and need to adhere to criteria set out in the Income Tax Act. One of these criteria is that you are not allowed to make donations to beneficiaries with any relation to the business or anyone in the business.
Corporate Sponsorships are a great way to promote your business and tap into the passion of your target audience. It is also a great story for your brand to tell when you have participated in an event such as the exciting Rally to Read!
Criteria for Qualifying Organisations :
- Needs to be an approved public benefit organisation
- Beneficiaries of your donation must issue a receipt as specified under Section 18A of the Income Tax Act
How Much can you Claim for a Corporate Sponsorship?
- Companies can deduct from their taxable income, the amounts they donated to approved organisations, up to the value of 10 per cent of their taxable income
- Donations must be paid or transferred during the year of assessment to qualify for a tax deduction in such tax year
The incentive to Give More
From 1 March 2014, any donations above the 10 per cent limit will be rolled over and carried forward to the succeeding year of assessment.
Donations to foreign organisations will not qualify as a tax deduction in South Africa.
Contact us today to be part of one of the Rally to Read initiatives and participate in a tax-deductible corporate sponsorship that makes a difference.
For more information on deductible donations: https://www.sataxguide.co.za/deductible-donations/