Amendments have been passed to legislation during 2000 regulating the taxation of non-profit organisations. These amendments came into effect on 15 July 2001.
In terms of this legislation, all entities, that were previously exempt from income tax, must re-apply to the Commissioner for the South African Revenue Service, before 15 July 2002 for exemption in terms of the new provisions. From the limited number of applications received thus far, it is clear that more time is required by organisations to re-apply. The Minister of Finance has therefore agreed to recommend to Parliament that the due date for re-applying for exemption be extended to 31 December 2003.
All NGO's and non-profit organisations whether or not they were exempted from the payment of income tax are required to register for income tax purposes and apply for exemption.
Prior to the introduction of these amendments exemption from taxation was provided for in respect of organisations such as religious, charitable and educational institutions; organisations providing residential care to the aged; housing, medical services, conducting research, nature conservation and cultural activities; amateur sporting associations; organisations providing social and recreational amenities or facilities for members; associations promoting the common interest of persons carrying on a particular business, profession or occupation; trade unions; chambers of commerce or industries; local publicity associations; fidelity or indemnity funds.
To apply for exemption from income tax, donations tax, estate duty, stamp duty, transfer duty and approval for donations to be tax deductible in terms of section 18A of the Income Tax Act, organisations must complete an application form (EI 1). The form may be obtained from local SARS branch offices or from the SARS website (www.sars.gov.za) in the category "Income Tax", sub-item "Public Benefit Organisations".
The completed form together with a copy of the founding document (constitution, trust deed or memorandum and articles of association) and latest financial statements must be submitted to the SARS Head Office.
ISSUED BY THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE