The South African Revenue Service (SARS) issued a revised version of its tax exemption guide on 15 December 2014. The publication provides general guidance on the taxation of public benefit organizations in South Africa.
The guide is intended to assist non-profit organizations (NPOs) in South Africa that qualify for approval as public benefit organizations (PBOs) in understanding the implications of income tax, donations tax, estate duty, transfer duty, dividends tax, securities transfer tax, the skills development levy, capital gains tax, value added tax and employees’ tax. Tax benefits are designed to assist NPOs by augmenting their financial resources and providing them with an enabling environment in which to achieve their objectives.
The mere fact that an organization has a non-profit motive or is established or registered as an NPO under the Nonprofit Organizations Act 71 of 1997 (NPO Act), or is established as a non-profit company under the Companies Act, does not mean that it automatically qualifies for preferential tax treatment or approval as a PBO. An organization will only enjoy preferential tax treatment after it has applied for and been granted approval as a PBO by the Tax Exemption Unit (TEU) and continues to comply with the relevant requirements and conditions as set out in the Act.
