Are pension funds, PBOs and universities exempt from all taxes?
More specifically, a non-profit organisation may apply to the South African Revenue Service (“SARS”) to be registered as a Public Benefit Organisation (“PBO”) in terms of section 30 of the Income Tax Act if it meets certain specified requirements. If the requirements of section 10(1)(cN) of the Income Tax Act are met by the PBO, then the accruals and receipts of such PBO are exempt from income tax.
Furthermore, the receipts and accruals of a university, of which the principal object is the conducting of scientific, technical or industrial research, which are approved by SARS and comply with the requirements of section 10(1)(cA), are exempt from income tax.
In addition, the receipts and accruals of a “pension fund” (as defined in the Income Tax Act) are exempt in terms of section 10(1)(d) of the Income Tax Act.
Tax exemptions are not limited to income tax – pension funds, PBOs and universities may also qualify for an exemption from donations tax, dividends tax and capital gains tax (all levied in terms of the Income Tax Act).
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