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

Posted 16 January 2014

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?

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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