The South African Revenue Service (SARS) would like to remind all non profit organisation, NGO's and such entities that they have one month to apply for tax exemption before the deadline at the end of the year.
New legislation was introduced during 2000 regulating the tax exempt status of entities qualifying for exemption from income tax.
In terms of the legislation certain types of entities have been clustered together and exemption is provided in only two subparagraphs of section 10 of the Income Tax Act.
Section 10(1)(cN) introduced a new concept of a "public benefit organisation" which conducts approved "public benefit activities". Such organisations must be approved by the Commissioner in compliance with the requirements set out in section 30 of the Income Tax Act.
Section 10(1)(d)(iii) and (iv) now provides for membership based entities such as social and recreational clubs, professional associations, trade unions, publicity associations and chambers of commerce.
In terms of the new legislation, all entities that were previously exempt from income tax, must re-apply to the Commissioner for the South African Revenue Service, before 31 December 2004 for exemption in terms of the new provisions. Entities that were previously not formally exempted must also apply for exemption in terms of the new legislation as they are required to register for income tax purposes.
All exempted entities are still required to submit their annual income tax returns.
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), which can be obtained from a local SARS branch offices or from the SARS website (www.sars.gov.za) under the Tax Exemption Unit. Further information pertaining to tax exemption can also be obtained from the SARS website.
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 with the application by the 31st of December 2004.
For more information please contact Sechaba Nkosi at (012) 422 5046 or 082 465 2901.
ISSUED BY THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE