In South Africa, an organisation that has a non-profit motive or is established or registered as a non-profit organisation does not automatically qualify for preferential tax treatment. An organisation will only enjoy preferential tax treatment after it has applied for and been granted approval as a Public Benefit Organisation (PBO).
The conditions and requirements for an organisation to be approved as a PBO are contained in section 30 of the Income Tax Act, while the rules governing the preferential tax treatment of PBOs are contained in section 10(1)(cN). Section 10(1)(cN) provides for the exemption from normal tax of certain receipts and accruals of approved PBOs. Certain receipts and accruals from trading or business activities will nevertheless be taxable.
SARS prepared a basic guides to assist non-profit organisations in South Africa to understand the basic implications relating to PBOs with particular reference to income tax and tax-deductible donations.
(Please click to download PDF document)
Basic Guide to Income Tax for Public Benefit Organisations (164kb)
Basic Guide to Tax-deductible Donations (164kb)