South Africa: Tax relief for donations to “Solidarity Fund” (COVID-19)

South Africa: Tax relief for “Solidarity Fund”

The “Solidarity Fund” was created in March 2020 to provide funds for initiatives to address the coronavirus (COVID-19) pandemic.

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The fund provides a platform for both the public and private sectors to contribute towards the various initiatives. Donations made to organisations established to carry out benefits for the public are generally exempt from donations tax. A taxpayer is allowed to deduct up to 10% of the taxable income in respect of donations paid or transferred during the year of assessment to certain public benefit organisations.

In order to encourage donations to the Solidarity Fund, extended tax relief measures have been put into place. Donations made to such organisations are exempt from donations tax and also deductible subject to the base limit. Also, taxpayers can deduct up to 20% (10% addition to the base limit) of their taxable income in respect of any amount they donate to the fund. This 20% will, however, only be valid for donations made up to 31 July 2020. Any donations over the limit may be carried forward and deemed to be a donation in the 2021/2022 year of assessment. The donations carried forward will be subject to the base 10% limitation.

Similar tax relief is offered to employees who make eligible donations through their employer’s payroll.


Read a June 2020 report [PDF 176 KB] prepared by the KPMG member firm in South Africa

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