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Choosing between a non-profit and a public benefit organisation

Sonja FrankShould 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:

NPO

  • 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.

PBO

  • 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:

NPO

  • 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.

PBO

  • 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 / sonja@exceed.co.za

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