The PBO service is the application for tax exemption and section 18A approval.
This is a registration process done through the South African Revenue Services Tax Exemption Unit
The benefit is that your organization is exempt from paying income tax and you may issue donors section 18A certificates which they can then claim as a deduction on their income tax returns.
If you have registered a NPO (Non-profit organisation) through the Department of Social Development, then you still have to apply for PBO status. You are not automatically exempt from income tax.
If you have registered a NPC (Non-profit company) through The Companies Intellectual Property Commission (CIPC), then you still have to apply for PBO status. You are not automatically exempt from income tax.
The South AfricanRevenue Services tax exemption unit changed their system whereby they will issue you the approval letter and ask you to amend your founding document at a later stage to include section 30 of the Income tax requirements.
For a NPC, your founding document is your MOI.
For a NPO, your founding document is your constitution.
This can be attended to at a later stage. It is advised to first get the application submitted in order to obtain a speedy outcome.
You have to perform PBO activities in order to apply. These are activities for the benefit of the general public.
You must have 3 unconnected directors if you are a NPC. Or 3 unconnected board members if you are a NPO.
It is a person that is not a family member or spouse.
Our turnaround times are as follows:
Full evaluation for new applications and exemption approval from the day that all the required information has been submitted (taxpayer fully compliant): 57 working days
Re-application, changes to existing approval – additional approvals such as S18A, changes to Constitutions; etc. (taxpayer fully compliant): 36 working days
Amendments to approved PBOs (name change, financial year-end, MOI, address changes, etc. (taxpayer fully compliant): 21 working days
Request for a reissue of an approval letter (taxpayer fully compliant): 21 working days
Assessment of returns where all supporting documents are submitted and return correctly completed: 30 working days
