How to Apply for Public Benefit Organisation (PBO) Status with SARS (Complete Guide)

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SARS

Applying for Public Benefit Organisation (PBO) status in South Africa is one of the most important steps for any non-profit organisation (NPO) that wants to operate legally, secure tax benefits, and receive donor funding. When approved by the South African Revenue Service (SARS), your organisation gains access to tax exemptions under Section 10(1)(cN) and may also qualify to issue Section 18A donation certificates, which donors can use to claim tax deductions.

But the application process can feel confusing for beginners, especially if you’re unsure of the legal requirements or don’t know what documents SARS expects.

This guide breaks down the entire PBO application process, step by step, in simple language. Whether you’re a non-profit company (NPC), trust, or voluntary association, this article will help you prepare everything correctly the first time.

What is a PBO? (Quick Explanation)

A Public Benefit Organisation (PBO) is a non-profit entity established to carry out public benefit activities (PBAs) such as:

  • education
  • poverty relief
  • community development
  • religion & culture
  • healthcare
  • environmental protection
  • youth development
  • research
  • charitable activities

Once approved, a PBO enjoys special tax privileges and can apply for Section 18A status (if eligible).

Step-by-Step Guide to Apply for PBO Status with SARS

Below is the full process, simplified, verified, and structured for easy understanding.

1. Download the Correct SARS PBO Application Form

The application form required is called Form EI-1.

You can download it from the SARS website in the Tax Exempt Institutions section.

You can fill it:

  • electronically (PDF format), or
  • print and fill manually

2. Choose Your Type of Organisation

SARS recognises three types of entities for PBO approval:

  • Non-Profit Company (NPC)
  • Trust (inter vivos or testamentary)
  • Association of Persons

You’ll need to select the correct category in the form.

You must also provide:

  • Date of establishment
  • Founding document
    • MOI (for NPCs)
    • Trust Deed
    • Constitution (for associations)

This is mandatory.

3. Provide Organisation Details

SARS requires complete and accurate information, including:

  • Full legal name of the organisation
  • Registered business address
  • Postal address
  • Income Tax Reference Number (if already registered)
  • Registration numbers (CIPC / Master’s Office / NPO Registry)

If you do not yet have an income tax number, SARS will allocate one after your application.

4. Provide Responsible Persons (Fiduciaries)

This is one of the most important parts.

Your organisation must have at least three (3) unconnected fiduciary persons.

These are your:

  • Directors (NPC)
  • Trustees (Trust)
  • Committee Members (Association)

✔ What does “unconnected” mean?

These individuals must not be related by:

  • marriage
  • blood (family)
  • business partnership
  • personal relationship
  • direct financial interest

SARS requires independent oversight to prevent misuse of funds.

✔ Provide for each fiduciary:

  • Full name
  • ID/Passport number
  • Contact details
  • Position (Director/Trustee/etc.)
  • Confirmation of no disqualification (e.g., not insolvent, not convicted of fraud)

Each person must sign the declaration section.

5. Banking Information and Financial Details

If your organisation is already operational, provide:

  • Organisation’s bank account details
  • Bank statements (usually 3 months)
  • Annual financial statements (if available)

If you are newly formed and don’t yet have an account:

  • SARS may allow you to proceed
  • But opening the bank account should be done as soon as possible

6. Select Your Public Benefit Activities (PBAs)

This is a crucial step.

SARS requires PBOs to perform Public Benefit Activities listed in:

Part I of the Ninth Schedule (for PBO status)

Part II of the Ninth Schedule (for Section 18A donor benefits)

Examples of PBAs include:

  • Welfare and Humanitarian
  • Health Care Services
  • Education and Development
  • Religion, Belief or Philosophy
  • Conservation, Environment, and Animal Welfare
  • Research
  • Community Development
  • Sport (non-professional)

You must indicate:

  • Your principal PBA (main activity)
  • Any additional PBAs that apply

Make sure these activities match your founding document.

7. Write a Narrative Description of Your Activities

SARS requires a clear description of:

  • What your organisation does
  • How you deliver your programs
  • Who your beneficiaries are
  • When and where activities take place
  • How you are funded

This must be detailed and aligned with the PBAs you selected.

Tip: Use bullet points, timelines, and real examples.

8. Registered Representative Information

Every organisation must appoint a Registered Representative who will communicate with SARS on tax matters.

Provide:

  • Full name
  • Contact number
  • Email address
  • ID or passport
  • Position in the organisation

9. Tax Practitioner’s Details (Optional)

If a tax practitioner is assisting you, provide their:

  • Practitioner number
  • Firm details
  • Contact information

This is optional.

10. Declaration & Signatures

This is mandatory.

SARS requires signatures from:

  • the person completing the form, and
  • all unconnected fiduciary persons (where required)

The declaration confirms that:

  • all information is true
  • funds will only be used for public benefit
  • fiduciaries accept legal responsibility

11. Submit Supporting Documentation

To avoid delays, include all required documents such as:

  • Founding document (MOI / Trust Deed / Constitution)
  • ID documents of all fiduciaries
  • Proof of address
  • Bank confirmation letter
  • Financial statements (if available)
  • Activity plan / Project descriptions
  • Any compliance certificates (NPO, CIPC etc.)

Attach everything in one submission.

12. Request Retrospective Approval (Optional)

If your organisation met all requirements in previous years, you can request:

Retrospective PBO approval

This means SARS may grant you PBO status from an earlier date.

Make sure you justify the request clearly.

After Submission — What Happens Next?

Once your application is reviewed:

✔ If approved:

  • You receive a PBO approval letter
  • You receive a unique PBO reference number
  • Your organisation becomes exempt from income tax

✔ For Section 18A:

If you applied and qualified, you will also receive authorization to issue tax-deductible donation receipts.

Ongoing Compliance: Your Responsibilities After Approval

Once recognised as a PBO, you must:

✔ Submit annual tax returns (IT12EI)

Even though you are tax-exempt, returns are still required.

✔ Maintain proper financial records

All income and expenditure must be documented.

✔ Spend funds only on public benefit activities

No private benefit is allowed.

✔ Notify SARS of changes

You must inform SARS if you change:

  • address
  • banking details
  • fiduciary persons
  • PBAs
  • founding document

Non-compliance can lead to the withdrawal of your PBO status.

Best Practices to Strengthen Your Application

  • Use clear language in your narrative description
  • Ensure your founding document includes all Section 30 requirements
  • Maintain independence between fiduciary persons
  • Prepare a simple, clean organogram
  • Keep finances transparent and well documented
  • Review the Ninth Schedule carefully before choosing PBAs

Conclusion

Applying for PBO status from SARS is a powerful step for any organisation committed to making a positive impact in South Africa. While the process may seem detailed, following the steps above will help you prepare a complete and accurate application.

Once you secure PBO approval, your organisation benefits from:

  • tax exemption
  • stronger credibility
  • eligibility for donor funding
  • potential Section 18A benefits
  • long-term sustainability

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