In order to qualify as a PBO an entity needs to have as its main object the carrying out of one or more public benefit activities in a non-profit manner.
These activities need to qualify in one or more of the following categories:
- welfare and humanitarian
- health care
- land and housing
- education and development
- conservation, environment and animal welfare
- religion, belief or philosophy
- cultural
- research and consumer rights
- sport
- providing funds, assets or other resources
- support services to other PBO’s
- hosting certain international events
Note: Only the activities in bold qualify for section 18A status.
For more information on how to register a PBO with SARS and the specific requirements refer to the SARS website: https://www.sars.gov.za/businesses-and-employers/tax-exempt-institutions/
Donations to approved public benefit organisations are exempt from donations tax and deductable for income tax as follows if section 18A status has been approved:
- Company donations limited to 10% of taxable income
- Individual donations limited to 10% of taxable income excluding any retirement fund lump sum benefits
- Any excess above the 10% cap above may be rolled over to subsequent years