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Do I need to pay or declare income tax on donations received?

Posted 16 January 2014 under Tax Q&A


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Hi Tim, I have started a small web design business with a turnover of just under R60 000 per year. I am struggling financially, so my father has been helping me with another R60 000 per year as a donation. I have read on the SARS website that as a sole trader if I earn less than R250 000 per year I do not have to register with SARS and I have no need to register for VAT. My question is, do I need to register with SARS for income tax as my income falls under the threshold without the donation or do I have to register because my turnover added to the donation is above the threshold?

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TaxTim TaxTim says:
17 January 2014 at 14:28

The donation is completely separate and does not constitute turnover if you father id donating it to you. The R250 000 rule is or salaried employees only earning income from a salary from one source and no other deductions at all. For a sole trader you would need to become a Provisional Taxayer

It would be best to obtain a SARS tax number now that once you cross the earnings threshold you will be able to have it on hand.


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235 DAYS
LEFT OF
TAX SEASON
2017


TaxTim will help you:

 Do Your Tax Return Easily
 Avoid penalties
 Maximise your refund

Tim uses your answers to complete your income tax return instantly and professionally, with everything filled in in the right place.

Let Tim submit your tax return direct to SARS in just a few clicks!

Get started