Create Your Own Sample Receipt Template Word for NPOs

Sample receipt template word for NPOs

foreign heart and today I'm going to talk to you about tax exemption for non-profit organizations in South Africa now there are different kinds of tax-exempt organizations but we're going to talk about a particular kind of organization called the public benefit organization most non-profits would qualify for public benefit organization status so that's why we're focusing on that particular kind of organization now the income tax act gives primarily two kinds of benefits for public benefit organizations so one is tax exemption and tax exemption basically means that the organization does not pay tax on its taxable income now it's actually partial tax exemption because in some situations a public benefit organization may be required to pay tax on its taxable income well it stacks on the excess of its business activities or trading activities we're not going to talk about that in much detail today just to mention that this is an interpretation note that's been prepared by the South African Revenue Service and it goes into detail on the whole issue of trading activities for public benefit organizations so it's available on the on their website and there's a couple of examples in this particular note the second kind of benefit is donor deductibility status and that is dealt with in section 18a of the income tax act basically what it means is that you know if I'm a donor and I'm making a donation to a non-profit organization with Section 89 status that organization will give me a receipt so the receipt I will use when I submit my tax returns and in SARS will give me a deduction on my taxable income so it's a benefit to me but it's also a benefit to the organization because some donors especially corporate owners prefer to give and to donate to that kind of an organization because of the the tax incentive that's linked to that so let's look at some of the main requirements for a public benefit organization first requirement is that the organization must carry on a public benefit activity now the income tax act lists about over 60 kinds of public benefit activities and it's very important that the organization must carry on either one or more of those activities if it doesn't carry on a public benefit activity then it won't qualify as a public benefit organization it might be eligible in terms of the other Provisions for tax exempt organization but not as a public benefit organization so that's the main requirement [Music] thank you the easiest way is to have a look at the application form now the application form is called ei1 form and public benefit organizations must use this form to apply for for tax exemption and ei1 is available on the website of the tax exemption unit [Music] page number one asked for um for the organization's legal status to be identified so it's either a voluntary Association or a non-profit trust or it's a non-profit company um it's also possible for a foreign charity that have been registered in another country to apply for PBO status in South Africa if it operates in in South Africa the name of the organization very important the name must must be consistent with the name in the farming document and the certificate of incorporation of the organization and then also the registered address and the postal address of the organization and you'll see that the these the registration number the tax registration number is asked for where applicable as well as the website details now very important to keep in mind is that when your application is considered the tax exemption unit will look at your website and to see if it the information provided in the application is consistent with the with the what's on on your website so it's very important to check for consistency and then further down the um the bank in particulars of the organization now on the second page the details of of two of the board members are asked now that's a linked to a requirement in the income tax act that a public benefit organization must have at least three unrelated board members um for the organization so it could have more board members and some of them could be related but at least three of those board members must not be related and so page two ask for the details of the two board members and you'll see on page number three the details of the third board member so those three people must not be related and their details must also be consistent with what's on your certificate of incorporation if it's a company or the letters of authority if it's a a trust [Music] so on page number three the bottom part you have to select if it's a public benefit organization it's uh section 10 1C in and if you apply for 18a status right at the bottom there's a also above Statics so main requirement is that you must carry on one or more public benefitilities and the kind of activities will determine whether you've got section 18a status or not and page number four up to page number seven will give you an indication of whether or not your organization actually carries on one or more public benefit activities so there are over 60 public benefit activities as you go through page number four to page number seven you'll see that some of them are involved and some are not involved so those that are involved will qualify for Section 89A status like on page number four most of the activities are involved as you scroll down further to the other Pages you'll find that some of the activities are not involved so those that are not involved will will not qualify for Section 89 status so you can visit the website of the tax exemption unit the details are reflected here and thank you for having watched this video