There are three different terms along with their tax implications that cause confusion. Read on to find out what they mean and what the implications and benefits are for each:

1. NPO - Non Profit Organisation which is registered with The Department of Social Development. This places your organisation's details on the website of registered NPO's. As the NPO, you receive a certificate with a NPO number and donors can see your address and other details on here.

Tax implication: you still need to pay tax as your NPO is not automatically exempted.

2. NPC - Non profit company, which is registered with CIPC (Company Intellectual Property). You receive secretarial documentation, such as a registration certificate and notice of incorporation and memorandum of incorporation.

Tax implication: you still need to pay tax as your NPC is not automatically exempted.

3. PBO - public benefit organisation. You need to register with SARS in order to obtain tax exemption and Section 18A approval. These two requirements will permit donors to deduct their donations for income tax purposes. You receive a document from SARS giving you a PBO number and S18A approval so that you may issue these donation certificates. In order to apply for PBO status, you need to perform public benefit activities. Please contact Jacky Botha Accounting Services (Pty) Ltd for assistance.

Authored by Jacky Botha

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