HomeHome SearchSearch MenuMenu Our productsOur products

Which entities qualify as PBOs?

by , 07 March 2014
Do you know the type of entities that qualify as Public Benefit Organisations (PBOs)? If not, continue reading to find out so you can reap the tax benefits.

The following entities qualify as PBOs

The Practical Tax Loose Leaf Service says the following entities will qualify as PBOs if they satisfy all the income tax exemption requirements:

  • Section 21 companies (formed under Section 21 of the Companies Act);
  • Trusts established in South Africa;
  • An association of persons incorporated, formed or established in South Africa; and
  • A branch, in South Africa, of any company, association or trust incorporated, formed or established in terms of the laws of a foreign country that is exempt from tax on income in that other country.

SARS' website explains that nonprofit organisations play a significant role in society as they take a shared responsibility with Government for the social and development needs of the country. As a result, they get preferential treatment when it comes to tax (tax exemption)

'Preferential tax treatment is designed to assist non-profit organisations by augmenting their financial resources.'

Important: The preferential tax treatment for not for profit isn't automatic. Your entity has to qualify as PBO as we've explained and meet the requirements set out in the Income Tax Act (ITA).

What's more…'your organisation will only enjoy preferential tax treatment after it has applied for and been granted approval as a Public Benefit Organisation by the Tax Exemption Unit (TEU),' says SARS.

Well there you have it. Now that you know the type of entities that qualify as PBOs, make sure you look out for a follow up to this article. We'll give you all the requirements your organisation's constitution must meet so you can qualify as a tax-exempt PBO.



Related articles




Related articles



Related Products



Comments
0 comments


Recommended for You 

  Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance



Here are all the most interesting, thought-provoking and common tax questions
asked by our subscribers over the last tax year – everything from A to Z!

To download Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance click here now >>>
  Employees always sick? How to stop it today



Make sure you develop a leave policy to regulate sick leave in your company.

BONUS! You'll find an example of the leave policy and procedure in this report.

To download Employees always sick? How to stop it today click here now >>>
  Absenteeism: Little known ways to reduce absenteeism



This FREE e-report will tell you how you can reduce absenteeism in your workplace while avoiding the CCMA and without infringing your employees' labour rights.

To download Absenteeism: Little known ways to reduce absenteeism click here now >>>
  7 Health & safety strategies to save you thousands



Don't let a health and safety incident cost you one more cent. Implement these seven
strategies in your company today.

To download 7 Health & safety strategies to save you thousands click here now >>>