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How do I apply to SARS for a non-profit company to be allowed to issue s18A tax certificates?

21 April 2015   (0 Comments)
Posted by: Author: SAIT Technical
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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 Persons)

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. 

 


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