FAQ: Is a public benefit organisation exempt from all taxes?

No, only from income tax . The PBO approval is only in respect of income tax. Once approved as a PBO, other exemptions applies, such as donation tax, estate duty, skills development levy, dividend tax, security transfer tax, and etc.

The PBO, as employer, may be liable to register for payroll taxes such as Pay-As-You-Earn (PAYE) and Unemployment Insurance Fund (UIF) depending on the income threshold.

Where an employer grants a benefit to an employee as a reward for services rendered, it constitutes a taxable benefit. The nature of the taxable benefit and the cash equivalent of the value must be reflected on the Employee Income Tax Certificate [IRP5/IT3(a)]

Where an employer grants an employee an allowance, the allowance is subject to the deduction of employees’ tax.
Exemption from Value-Added Tax (VAT) must be applied for separately at a SARS branch. Transfer Duty exemption must be applied for at a SARS branch.

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