Choosing between a non-profit and a public benefit organisation
Should we register our organisation as a Non-Profit organisation (NPO) or a Public Benefit Organisation (PBO)? What’s the difference?
At Exceed we are often asked these questions. Some of the reasons why an organisation would like to register as a NPO or PBO may include the following:
- The organisation’s name is put on the register of Non-Profit Organisations of South Africa.
- An organisation needs an NPO number to apply for government grants.
- It brings the organisation under the control of the Department of Social Development.
- The organisation obtains an exemption from Income Tax for donations received.
- Depending on the activities of the organisation, the donors of the organisation are provided with a Tax deductible Section 18A receipt.
- It brings the organisation under the control of the Head Tax Exemption Unit of SARS.
Register a PBO or NPO by taking the following steps:
- Register at the Department of Social Development
- Register online or fill in the ‘Application for Registration by a Non-Profit Organisation’ form.
- Duties once registered are provided on the website as well as on the application form.
- Submit an EI1 and E2 form that is available on the SARS website to the Head Tax Exemption Unit.
- A detailed description of the proposed activities or current activities must form part of the application.
At Exceed we recommend that your organisation is registered as a PBO. The NPO registration is voluntary.
For more information, contact Sonja Frank or Johanette Groenewald of Exceed Tax and Advisory Services, tel. 021 882 8140 / firstname.lastname@example.org