How do I apply to SARS for a non-profit company to be allowed to issue s18A tax certificates?
21 April 2015
Posted by: Author: SAIT Technical
Author: SAIT Technical
Q: How do you
apply for a non-profit company to issue section 18A certificate for donations
received? Which forms do you fill out and what supporting documents are required?
Is there a specific office where these are submitted? I asked all these
questions at the Boksburg SARS branch but could not be assisted. Your timely
response will be greatly appreciated.
A: The form that
must be used for the application is the same form (the EI 1 Application form)
that is used for the approval of the non-profit company as a public benefit
organisation. It is important to note
that an organisation that is registered as Non Profit Company (NPC) does not
automatically qualify for preferential tax treatment. An organisation will only enjoy preferential
tax treatment after it has applied for and been granted approval as a Public
Benefit Organisation (PBO) by the Tax Exemption Unit (TEU). The eligibility to issue tax deductible
receipts is dependent on section 18A approval granted by the TEU, and is
restricted to specific approved organisations which use the donations to fund
specific approved Public Benefit Activities.
The tax Exemption Guide for Public Benefit Organisations in
South Africa (Issue 4) 9at the following link http://www.sars.gov.za/AllDocs/OpsDocs/Guides/LAPD-Gen-G03%20-%20Tax%20Exemption%20Guide%20for%20Public%20Benefit%20Organisations%20in%20South%20Africa%20-%20External%20Guide.pdf
) provides useful information (Paragraphs
23 and 24).
The supporting documents needed are:
A Founding Document – which is either of the following:
Signed and Dated Constitution (if you are an Association of
Copy of the Memorandum of Incorporation and Articles of
Association (if 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 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).
Disclaimer: Nothing in this query and answer should be construed as
constituting tax advice or a tax opinion. An expert should be consulted for
advice based on the facts and circumstances of each transaction/case. Even
though great care has been taken to ensure the accuracy of the answer, SAIT do
not accept any responsibility for consequences of decisions taken based on this
query and answer. It remains your own responsibility to consult the relevant
primary resources when taking a decision.