Get Your PBO Status Approved with Ease and Full SARS Compliance

A Public Benefit Organisation (PBO) is a non-profit entity that SARS approves to conduct specific public benefit activities. These activities must fall under the categories listed in the Ninth Schedule of the Income Tax Act.

PBO status gives the organisation tax exemptions, and in some cases (Section 18A approval), allows donors to claim tax deductions.

Not all NPOs automatically qualify for PBO status — SARS reviews governance, objectives, and operational structure before approval.

No, they are completely different.

• NPC → Registered with CIPC

• NPO → Registered with the Department of Social Development

• PBO → Approved by SARS for tax-exempt status

You can be an NPC without being a PBO, and you can be an NPO without qualifying for tax exemption.

PBO is specifically a tax classification, not a legal entity type.

PBO status allows your organisation to:

• Operate tax-free on most income

• Issue Section 18A certificates (if applicable)

• Attract more donors

• Enhance credibility and transparency

• Comply with legal nonprofit governance

This status makes fundraising significantly easier because donors receive tax benefits from their contributions.

Only organisations conducting Public Benefit Activities listed under the Ninth Schedule of the Income Tax Act can qualify. Common qualifying categories include:

• Education

• Welfare and humanitarian activities

• Religion

• Animal welfare

• Health services

• Youth development

• Community upliftment

• Environmental conservation

SARS assesses whether your activities genuinely benefit the public.

PBO registration typically takes between 4–12 weeks, depending on SARS workload, the organisation’s structure, and document completeness.

Delays occur if your founding documents do not include required clauses, or if SARS requires additional clarifications.

SARS requires:

• Founding documents (MOI, Trust Deed, or Constitution)

• Detailed activity description

• Financials (if available)

• ID copies of founding members

• Minutes or resolutions supporting the application

• Organisational structure and governance details

• Proof of address

The founding document MUST contain specific SARS-required clauses to qualify.

No. Section 18A approval is separate and only granted to organisations involved in specific categories like:

• Education

• Welfare & humanitarian assistance

• Health initiatives

• Certain NGO development activities

If approved, donors can claim their donations as tax deductions.

Not all PBOs qualify — for example, religious organisations generally do not qualify for 18A.

Yes, SARS may backdate PBO status to the date the organisation began conducting qualifying public benefit activities.

This can help with donor receipts and past financial reporting.

However, backdating is not guaranteed and depends on document evidence.

Yes, but with restrictions. A PBO may conduct business activities as long as the income is used to support public benefit activities. However:

• Commercial activities must be incidental, or

• They must fall under the permissible business activities in the Act

Improper structuring can lead to tax liabilities or suspended PBO status.

Yes. SARS allows PBOs to pay reasonable salaries to employees, directors, or trustees.

However, compensation must be market-related and cannot be excessive or disguised as profit distribution.

PBOs must remain non-profit in nature.

SARS generally rejects applications if:

• Founding documents lack required clauses

• Activities are not public-benefit aligned

• Governance structures appear weak

• Objectives are too commercial

We review rejection reasons, update documents, and resubmit on your behalf.

Yes. SARS can suspend or revoke PBO status for:

• Operating outside approved activities

• Paying out profits to members

• Failing to maintain proper governance

• Not submitting tax returns

Losing PBO status exposes the organisation to tax liability.

Yes. Even though PBOs are exempt from certain taxes, they must still submit annual income tax returns (IT12EI). Failure to submit can cause penalties and affect compliance.

Section 18A allows donors (individuals and companies) to deduct certain donations from taxable income.

This significantly improves fundraising potential.

Certificates must include specific SARS-approved wording.

No.

PBOs cannot support, oppose, or campaign for political parties. Noncompliance can cause immediate loss of PBO status.

This depends on annual income and organisational size.

Large PBOs must be audited, while small PBOs may submit independently reviewed statements.

SARS may request financial records at any time.

Yes. Churches, ministries, and faith-based organisations qualify under public benefit activities related to religion.

However, they must demonstrate that they operate for the benefit of the public, not a private group.

Founding documents must include:

• Non-profit clause

• Winding-up clause

• Prohibition of profit distribution

• Public benefit objectives

• Governance structure

• Proper fiduciary responsibility

If any clause is missing, SARS will reject the application.

Yes.

SARS may request:

• Photos

• Reports

• Programme details

• Community impact evidence

Your activities must match your stated objectives.

Yes — if they operate in South Africa and conduct public benefit activities in the country. They must still meet all SARS requirements and appoint a local representative.