How to Apply for PBO Status with SARS South Africa — Complete 2026 Guide
A step-by-step guide to applying for Public Benefit Organisation (PBO) status with SARS — including requirements, documents, tax benefits and common mistakes to avoid.
To apply for PBO status with SARS, your organisation must first register as a non-profit (NPC, Trust or Association) and obtain a tax number. Then submit Form EI 1 to SARS Exempt Institutions along with your founding documents, financial statements and a description of your public benefit activities. SARS typically takes 90–120 days to process the application.
Table of Contents
What is a Public Benefit Organisation (PBO) in South Africa?
A Public Benefit Organisation (PBO) is an organisation approved by SARS under Section 30 of the Income Tax Act to carry out specific public benefit activities. PBO status grants significant tax exemptions — including exemption from income tax, VAT relief, and the ability to issue tax-deductible receipts to donors under Section 18A.
PBOs operate in areas such as welfare, health, education, conservation, religion, and community development. The status is granted by SARS’s Exempt Institutions unit and is not automatic — it must be applied for separately from standard tax registration.
It is important to distinguish between a Non-Profit Organisation (NPO) registered with the Department of Social Development, and a PBO approved by SARS. You can be an NPO without being a PBO — and vice versa. For full tax benefits, most organisations pursue both registrations.
Tax Benefits of PBO Status — 2026
Income Tax Exemption
Approved PBOs are exempt from income tax on receipts used for their public benefit activities under Section 10(1)(cN) of the Income Tax Act.
VAT Benefits
PBOs may qualify for VAT exemption or reduced VAT on certain goods and services — particularly for welfare and educational activities under Schedule 1 of the VAT Act.
Section 18A Receipts
Approved PBOs conducting certain activities can issue Section 18A certificates — allowing donors to deduct donations from their taxable income (up to 10% of taxable income).
Donations Tax Exemption
Donations made to approved PBOs are exempt from donations tax under Section 56(1)(h) — making your organisation more attractive to donors.
Dividends Tax
Dividends received by an approved PBO from investments may be exempt from dividends withholding tax — preserving investment income for the organisation’s activities.
Estate Duty Relief
Bequests to approved PBOs are deductible from the estate for estate duty purposes — making legacy giving a tax-efficient option for donors.
Who Qualifies for PBO Status?
To qualify for PBO status, your organisation must meet all of the following criteria under Section 30 of the Income Tax Act:
| Requirement | Detail |
|---|---|
| Legal structure | Must be a non-profit company (NPC), trust, or voluntary association |
| Public benefit activities | Must carry out activities listed in Part I of the Ninth Schedule of the Income Tax Act |
| Non-profit purpose | No part of net income may be distributed to members, founders or employees (other than reasonable salaries) |
| Asset lock | Assets must be used exclusively for PBA activities — on dissolution, assets must transfer to another approved PBO |
| South African entity | Must be incorporated, formed or established in South Africa |
| Tax compliance | Must be registered for income tax with SARS before applying |
PBO Application Requirements
Before you apply, your organisation must have the following in place:
Pre-application checklist
- Registered legal entity — NPC (Companies Act), Trust (Master of High Court), or Voluntary Association
- Registered for income tax with SARS — must have an income tax reference number
- Founding documents that include a non-distribution clause, asset lock clause, and dissolution clause
- At least one public benefit activity from the Ninth Schedule clearly stated in founding documents
- Registered office address in South Africa
- Completed and up-to-date financial statements (or projected budget if new organisation)
- List of all office bearers / directors / trustees with ID numbers and contact details
Documents Required for PBO Application
| Document | Notes |
|---|---|
| Completed Form EI 1 | Main SARS PBO application form — available on SARS website |
| Founding document | Memorandum of Incorporation (NPC), Trust Deed, or Constitution |
| CIPC registration certificate | For NPCs — Certificate of Incorporation from Companies House |
| Master’s Letter of Authority | For trusts — issued by Master of the High Court |
| Financial statements | Latest audited/reviewed financials OR projected budget for new organisations |
| List of office bearers | Names, ID numbers, addresses and contact details of all directors/trustees |
| Description of activities | Detailed written description of all public benefit activities carried out |
| Bank confirmation letter | Confirming organisation’s bank account details |
| NPO registration certificate | If registered with Department of Social Development (not mandatory but recommended) |
Step-by-Step PBO Application Process
After PBO Approval — What Happens Next
Once SARS approves your PBO status, there are several important next steps:
Update your tax profile
Notify SARS of your PBO number on eFiling. Ensure your income tax returns are filed under your new exempt status going forward.
Apply for Section 18A separately
PBO status does not automatically grant Section 18A status. If you wish to issue tax-deductible receipts to donors, apply separately using Form EI 2.
Register for VAT if applicable
If your organisation’s taxable supplies exceed R1 million/year, VAT registration is required. PBOs may qualify for specific VAT exemptions.
Notify donors
Share your PBO approval letter and reference number with existing and potential donors so they can benefit from donation deductions on their tax returns.
Section 18A — Tax-Deductible Donations
Section 18A is a separate approval from PBO status. It allows donors to deduct donations made to your organisation from their taxable income — up to 10% of taxable income per year. This makes your organisation significantly more attractive for fundraising.
| Section 18A Detail | Information |
|---|---|
| Maximum donor deduction | 10% of taxable income per year |
| Unused portion | Carries forward to the next tax year |
| Application form | Form EI 2 — submitted to SARS Exempt Institutions |
| Activities that qualify | Welfare, education, health, conservation — Part II of Ninth Schedule |
| Receipt requirement | Organisation must issue a Section 18A receipt for each donation |
| Annual reporting | Must submit Section 18A receipts issued to SARS annually |
Not all PBO activities qualify for Section 18A. Religious organisations, for example, are typically PBOs but do not qualify for Section 18A status.
Annual PBO Compliance Requirements
PBO status is not a once-off process. SARS requires ongoing compliance to maintain your exempt status:
| Compliance Requirement | Frequency | Notes |
|---|---|---|
| Income Tax Return (ITR12T) | Annual | File even if tax-exempt — SARS still requires a return |
| Financial statements | Annual | Audited or independently reviewed depending on size |
| Section 18A receipts report | Annual | Only if Section 18A approved — submit list of receipts issued |
| Notify SARS of changes | As they occur | Changes to office bearers, activities, or founding documents |
| NPO annual report | Annual | If registered with DSD — separate from SARS compliance |
| VAT returns | Monthly/bi-monthly | Only if VAT registered |
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