Please used the following link log in and select NPC MOI tax exemption
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In this video, I will explain how to apply for tax exemption status for your non-profit company. The process is identical for both NPCs and NPOs. Just a reminder, NPC are non-profit companies registered with CIPC while an NPO’s are Non-profit Organisations registered with the Department of Welfare. Both of these entities need to apply to the Tax Exemption Unit at SARS to be granted Public Benefit Organisation Status. It is this PBO status that exempts the entity from income tax.

Currently non-profit entities are not automatically exempt from tax as was the case in the past. However as a result of the abuse of this status, the Tax Exemption Unit of South African Revenue Service now requires all Non profit entities to demonstrate that they genuinely dedicated to altruistic or philanthropic community upliftment and deserving of company income tax exemption.

So why is this important? Besides the obvious benefit of not having to pay company tax, your doners can also claim their donations as a taxable expense of up to a maximum of 10% of their taxable income; this is a significant enabler of the NPCs fundraising.

On the topic of fundraising, the old fundraising numbers issued by the Department of Social Development are no longer relevant and do not exempt the entity from tax.

To get this done you need to apply to the SARS tax exemption Unit. One of the requirements is that the NPO’s need to amend their constitutions while NPC’s need to include clause 18A in their MOI. This clause addresses the distribution of excess funds. For example, on deregistration assets can’t be sold but need to be donated to a similar organisation which also has PBO status.

We recommend that you amend your MOI at the same time as you apply to the Tax Exemption Unit as the two processes can run simultaneously and should save you time as the entire process can take a few months to complete.

If you would like assistance with amending your MOI with the correct wording for Clause 18A please click on the link in the description

I hope you have found this interesting, so as always remember WE ARE HERE TO HELP

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