How do I apply for Income Tax Exemption as a Public benefit organisation (pBO)?

how to apply for tax exemption

How do I apply?

  • On an EI 1 Application form (to be completed by all organisations).
  • This application form must:
    • Contain the details of three unconnected persons i.e. three people who are not related to each other. People are considered to be connected if they are close relatives to one another.
    • Be signed by the organisation’s Public Officer / Public Representative or agent.
  • A written undertaking accompanying the EI 1. Depending on the nature of your organisation, it will be one of the following:
    • El 2 - Written undertaking (only for public benefit organisations to ensure compliance with

    section 30 of the Income Tax Act)

  • EI 2 B – Written undertaking (only for foreign branches to ensure compliance with section 30 of

    the Income Tax Act)

  • EI 2 C - Written undertaking (only for recreational clubs to ensure compliance with section 30A of the Income Tax Act)

    Top tip. The EI 2, EI 2 B, or EI 2 C must be signed by the three unconnected office bearers contained in the EI 1

    application form.

    What supporting documents do I need?

    • A Founding Document – which is either of the following:
      • Signed and Dated Constitution (if you are an Association of Persons)
      • Signed copy of the Trust deed from the Master’s Office and Letter of Authority from the Master of High Court (if you are a Trust)
      • Copy of the Memorandum of Incorporation and Articles of Association (if you are a non-profit company registered with Company Intellectual Property Commission (CIPC).
  • Legible certified copies of a valid identity document of all three fiduciary responsible office bearers as well as the Public Officer / Representative (if different from that of the three office bearers).
  • A copy of a bank statement with original bank stamp or ABSA eStamped statement not more than three months old that confirms the account holder’s legal name, account number, account type and branch code where applicable; or if a taxpayer has opened a new bank account (less than a month old) and cannot produce a bank statement, they will need an original letter from the bank on the bank letterhead with the original bank stamp confirming the account holder’s legal name, account number, account

    type, branch code and reflecting the date the bank account was opened.

  • Financial Statements must be submitted if the organisation has been in existence for longer than a year (and for each financial year that it has been in existence). If the organisation has been in existence for more than a year, but it has not been in operation (dormant), it must submit an affidavit with its bank statements.
  • Proof of residential or physical business address.
    • For the organisation; and
    • For the Public Officer (if not already registered with SARS as a taxpayer).
    • To see which documents are acceptable as proof of residential address, see our Relevant material/supporting documents page and look at specifically 'How to update my residential or business address section'.

     How do I submit my application?

    • All of the above should be submitted at your nearest SARS branch.

    Since the introduction of SARS’s new electronic registration system on 12 May 2014, applications can no longer be submitted via post or fax.

    Under exceptional circumstances e.g. if the applicant is incapacitated or lives more than 200km from their nearest SARS branch. they can ask a representative person to hand in their registration application at a SARS branch. However, that representative person will firstly need to register with SARS as a legal entity (they will need to bring their ID and power of attorney/ appointment letter to show that they are representing their client).

  • If you are already registered as a Non-Profit Company (NPC) with the Companies and Intellectual Property Commission (CIPC), then you will automatically be registered with SARS for Income Tax purposes.
  • Once you are registered with SARS, this does not mean that you have been approved for tax exemption. This

    will entail a further approval process. Also, even if exemption from income tax is granted, all PBOs must still complete an annual Income Tax Return on an IT12EI form.

  • The exemption approval process takes approximately 36 working days from the day that all the required

    information has been submitted.

  • Top tip: It is essential that all information provided in the application is correct and complete to avoid unnecessary delays.

    Need help?

    • Call the SARS Contact Centre on 0800 00 SARS (7277)
  • Call the Tax Exemption Unit (TEU) on 012 483 1700 or

    Source: www.sars.gov.za

    Category: Taxes

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