Tax Exemption Applications: What SARS Rejects And Why
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The exemption application comes back rejected. The constitution was fine. The founding document was fine. The wrong "Nature of Entity" was selected at income tax registration months earlier, and everything downstream was built on it.
SARS published Issue 12 of the Tax Exempt Institutions Connect newsletter on 6 August 2026. It covers exactly this: choosing the correct nature of entity when registering for income tax, choosing the correct exempt institution category when applying for exemption, the requirements for section 18A tax-deductible receipts, and the submission of IT3(d) third-party data.
Choosing the correct Nature of Entity at income tax registration
Nature of entity is set at registration. Non-profit company, trust, association of persons. The exemption application form that follows adapts to the category selected, so a wrong entity type produces a form asking for the wrong documents.
Selecting the right exempt institution category
Category is the second decision. A public benefit organisation approved under section 30 of the Income Tax Act is not the same thing as an institution, board or body under section 10(1)(cA)(i), and the requirements differ. SARS published application checklists for every exempt institution category in April 2026, on the Tax Exempt Institutions page, which is the fastest way to confirm a client is applying under the right one. The move to online applications, covered in New Online Income Tax Exemption Application Process, makes a wrong selection harder to undo quietly.
Section 18A receipt requirements: why the donor pays for your error
If a section 18A receipt is missing required information, SARS rejects the donor's deduction claim. The donor does not blame SARS. The donor phones the welfare organisation and asks why their R200,000 donation is not deductible, and then thinks about next year.
Two binding general rulings matter here. BGR 70 deals with issuing a single section 18A receipt to a donor for multiple bona fide donations. BGR 71 deals with how a donation of property in kind must be reflected on the receipt.
IT3(d) third-party data deadlines: 31 October and 31 May
Approved section 18A entities submit third-party data twice a year. The bi-annual submission covers 1 March to 31 August and is due by 31 October. The annual submission covers the full tax year to the end of February and is due by 31 May. A nil declaration is required even where no receipts were issued.
Public Notice 6762 added mandatory information from 1 March 2026 for the 18A receipts, including the income tax reference number and information relating to donations of property made in kind. The detail sits on SARS's Section 18A and IT3(d) Third Party Data page.
The next date is 31 October 2026. That is eleven weeks away.
A file review checklist for exempt institution clients
For each exempt client:
Confirm the nature of entity on the SARS record matches the legal form
Confirm the exemption category matches the activities actually carried on
Pull a sample of section 18A receipts and test them against the required fields; and
Diarise 31 October.
Losing exemption status is not a paperwork problem. It turns a welfare organisation into an ordinary taxpayer with a tax liability and no budget for it, and it closes the door on the donors who fund the work. Filing obligations do not disappear because an entity is exempt, as we set out in Non-Profit? You Still Need to File.
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