PBO Registration

What are the Advantages of PBO Registration Number?

1. No Tax. Most income derived from Donors will be exempt from income tax.
2. More Income. You will get more Donors as most of them prefer organisations to be registered as PBO’s for their own Tax Benefits and trust.

To qualify for approval as a PBO an organisation must be incorporated or established in South Africa as: 

1. A non-profit company which has a memorandum of incorporation as a founding document.
2. A trust which has a trust deed as a founding document.
3. An association of persons which has a constitution as a founding document.

Preferential tax treatment is designed to assist non-profit organisations by augmenting their financial resources. If the exemption application has been approved by SARS, the organisation is registered as a Public Benefit Organisation (PBO) and allocated a unique PBO reference number.

The PBO wishes to purchase a property in order to further its public benefit activities (PBAs) which are exempt supplies in terms of the VAT act. The PBO also makes a small amount of taxable supplies which is why it is registered as a VAT vendor.

Both NPO and NPC are allowed to register with SARS (South African Revenue Services) as a PBO to benefit from special tax exemption. Non-profit companies (NPCs), as well as trusts, can still get PBO status even without needing to register under the NPO Act.