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Six more tax consequences for PBOs

by , 10 March 2014
Did you know that there are tax consequences if you're a Public Benefit Organisation (PBO)? Continue reading to find out what they are so you can comply.

Make sure you're aware of these six tax consequences if you're a PBO

In this article, we gave you four tax consequences for PBOs. Now we're going to give you six more tax consequences so you can comply.

#1: PBOs fall within the Unemployment Insurance Fund (UIF) net

There are two registrations required for UIF in you're a PBO:

  • For payment of contributions each month, your PBO must register with SARS. This registration occurs simultaneously with the registration for employees' tax and the details required must be recorded on the same EMP101 application form.
  • For registration of employees, your PBO must register as an employer directly with the Unemployment Insurance Fund.

#2: PBOs are exempt from Skills Development Levy (SDL)

PBOs are exempt from registering for SDL and this means you don't pay SDL as required by the Skills Development Levies Act.

#3: You must register with the Compensation for Occupational Injuries and Diseases Fund (COID)

The Practical Tax Loose Leaf Service says while COIID isn't tax, you mustn't overlook this registration.

Every employer is required to register with the COID Fund and PBOs aren't exempt from this requirement.

#4: Your PBO doesn't need to pay stamp duty

'A PBO is exempt from stamp duty where any instrument is executed by or on behalf of any PBO and if the duty would've been legally payable and borne by that PBO,' says the Loose Leaf Service.

#5: PBOs need not pay securities transfer tax (STT)

A PBO is exempt from STT when any security is transferred to a PBO and the STT would've been legally payable and borne by that PBO.

#6: A PBO is exempt from transfer duty but it's a conditional exemption

A PBO is exempt from transfer duty where it acquires immovable property. But, you must meet the following two requirements for the exemption to apply:

  1. Substantially, the whole property must be used for the purposes of one or more public benefit activity carried on by the PBO.
  2. If the property is later used for a purpose that isn't a public benefit activity, you'll have to pay transfer duty.

Now that you know all about the tax consequences for PBOs, make sure you comply to avoid penalties.

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