The PBO: Additional information and guidelines

Additional information and guidelines about the PBO process

What is a PBO?

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

What is the benefit?

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 I have a NPO or NPC, what then?

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.

Do I need to amend my MOI (Memorandum of Incorporation)

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.

What are the prerequisites for PBO registration?

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.

What is an unconnected person?

It is a person that is not a family member or spouse.

How long does it take for me to get my PBO approval letter?

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

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