General Tax relief is available in the countries listed below. A common theme to qualify for relief is that contributions be made to organisations: which are not for profit, such as Education Africa, which are registered in the country in which the donor operates, which meet the local tax requirements governing contributions, provided that the donor does not benefit from the donations. While the requirements differ in each country, our investigations suggest that Education Africa meets the above criteria. Education Africa will present donors with its certificate of registration and any other documentation required for the donation to qualify for deduction. In addition to donations, contributions in South Africa may, in appropriate circumstances, be in the form of tax-deductible sponsorships. A summary of allowances and procedures for each country is set out below: South Africa Donations South African resident taxpayers (including companies, trusts and individuals) are entitled to deduct donations made to Education Africa from their taxable income. The deduction is limited to 5% of the taxpayer's taxable income before claiming the donation and (in the case of an individual) medical and dental expenses. Any claim for a deduction of a donation must be supported by an official receipt from Education Africa. Donations to Education Africa are exempt from donations tax and bequests from estates to Education Africa are exempt from estate duty. Sponsorships Sponsors can deduct sponsorships for income tax purposes to the extent that the sponsor can prove that the expenditure is directly related to an intention to secure a commercial benefit for the sponsor in the course of ordinary trading activities. The commercial benefit would usually be in the form of advertising or publicity for the sponsor, thus promoting its products or services. Sponsorships may be disallowed for income tax purposes to the extent that they are motivated by a philanthropic or altruistic purpose. Contributions which do not qualify as a sponsorship should be considered in terms of the provisions relating to donations. Black Economic Empowerment (BEE) In terms of proposals published by the Department of Trade and Industry, entities contributing to Education Africa will be able to score points on a BEE scorecard which will facilitate their ability to transact business with national, provincial and local government, institutions and many businesses in the formal sector. The draft "Codes of Good Practice on Broad-Based Black Economic Empowerment" includes a balanced scorecard and, in terms of the proposals, a 10% weighting is given to entities contributing at least 3% of their profits to "corporate social investment in health, education, poverty alleviation and community development". In terms of the department's proposals, social responsibility initiatives could secure significant business advantages for contributors. USA US organisations and/or individuals making charitable contributions to Education Africa USA may be able to claim a tax deduction of the contributions, to the maximum of 10% of their taxable income. United Kingdom British corporations may make a gift under a Charitable Deed of Covenant or under the Gift Aid Scheme. The Charitable Deed of Covenant is a legal document under which the payer undertakes to make regular annual payments (for example, a percentage of its annual profits) for a period of more than three years. This is usually four years. The Gift Aid Scheme is a tax relief for single outright cash gifts. There is no limit to the gift, unless the company is a close company (one under the control of five or fewer people). The procedure for both is that the donor deducts tax from each payment and sends to Education Africa UK the net amount, together with a voucher detailing the payment made and the tax deducted. Education Africa UK can then claim back the tax from the revenue authorities. The information contained above has been prepared by Ernst & Young for general guidance only and is not intended as a substitute for specific advice in considering the tax effects of specific donations or sponsorships. While care has been taken in compiling the information contained herein, no liability is accepted for the consequences of any inaccuracies.
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