Sponsor and Tax?

[Racingsnail]

Hijack on.

 

With regards to fundraising, what amount is deductable? Assuming all the correct invoices and NPO forms etc are in place.

I have a dream of a fundraiser next year and this would help.

 

Hijack off.

[Tankman]

As stated above:

 

Donations for individuals up to R100 000 per year.

Donations for corporate entities not considered to be public companies up to R10 000 per year.

 

But please note it is exempt from tax, not tax deductible (thanks canerat)

[Bikalot]

Does anyone have a precise answer on this matter?

 

tax is law, is there ever a precise answer?

[Tankman]

yup, now we are getting somewhere...

 

be certain of this:

You will die

You will pay tax

 

Doesnt really matter in which order these two events occurs either, both will happen.

Most of us pay tax, then we die and pay some more tax!

[Eugene]

Tax and the loopholes are always interesting.

 

His question:

 

 

 

In this case no, because the company will be paying the entry fees directly to the organizers and not to you. They are not going to be handing you a whack of cash are they? What the company does with their money has nothing to do with your personal income tax unless they give the money directly to you. (I doubt that there are many companies that would give the funds directly to you ... unless you work in government and have shares in the company of course)

 

This is not a donation, because the company is receiving a benefit. The benefit is the advertising that they receive.

 

He does not need to receive the cash. I refer to the definition of "gross income" where it clearly states "in cash or otherwise"

 

I really doubt that the company will pay the entry fees themselves anyway.

 

Irrespective of the small amount and the deductability of the expenses, I still believe this amount is taxable in his his hands.

 

He is providing a service to the company (he is providing the advertising space) and is getting a benefit in return.

Edited October 12, 2010 by Eugene

[Tankman]

What you doubt and what the question was, are two different things.

 

If the a company gives me sponsored kit and pays for my entries etc., do I have to declare those as income/perks?

 

If the company pays for his entries, they should be doing so directly to the race organizers, he will never receive that money so he will have nothing to declare. If the company pays the race organizers they can issue a receipt and it can be seen as an advertising expense. But if the company pays the entry fees directly to a natural person, that person can not issue them with a receipt, it would be daft of the company to pay the person directly instead of the race organizers.

Edited October 12, 2010 by Tankman

[Cassie]

I guess its similar to when a company takes / sponsors/ a 4 ball in golf (which can also run into 1000's of rands)....is this not just part of their advertising budget?

 

I do know for a fact that a NPO company can issue one with a "receipt / certificate" that is tax deductable...

[Harry Potter]

Tricky situation it seems

[Eugene]

What you doubt and what the question was, are two different things.

 

 

 

If the company pays for his entries, they should be doing so directly to the race organizers, he will never receive that money so he will have nothing to declare. If the company pays the race organizers they can issue a receipt and it can be seen as an advertising expense. But if the company pays the entry fees directly to a natural person, that person can not issue them with a receipt, it would be daft of the company to pay the person directly instead of the race organizers.

 

In my 15 odd years as a tax auditor at SARS, I have seen some pretty daft things. This is all accademic anyway as the amount is so minimal, I doubt the SARS will even worry about it.

 

By the way, who says that a natural person cannot issue a receipt?

[Java001]

Very important question here that might have an impact on a correct answer to Edman is whether the co. that picks up the tab, is in any way connected or related to him and/or whether he is employed by them.

[Shebeen]

 

But please note it is exempt from tax, not tax deductible (thanks canerat)

 

my ignorance aside, i take it these are not actually the same thing?

 

i know one has to be that you can take it off your pre tax earnings without it covering any tax charges. which one, and what the ohter is, i don't have a clue.

[Eugene]

Exempt means that you don't have to pay tax on the income. Something that is tax deductable is normally an expense that you can deduct from your earnings that is taxable (meaning you only pay tax on the difference)

[Tankman]

 

By the way, who says that a natural person cannot issue a receipt?

 

Me, I do, I am the law

[cat-i]

I would like to get some sponsors for me and my partner for the Panorama tour, My idea is to get the sponsor to pay the entry and the four kits designed specific for the sponsor, I would like to know if the sponsor can claim that from tax or how does claimable sponsorship work, or can one even claim your sponsor from tax?

 

would you pay tax on the sponsorship?

 

<edit> ignore - question already asked and answered

Edited October 12, 2010 by cat-i

[Shebeen]

Do people (thought their businesses) claim VAT on race entries, and get queried?

 

at about R90k that must be close to R14k of VAT for the cape epic.

[pe3nguin]

Holy forking necrobump batman.