TAX FAQ: VAT Treatment of a PBO’s Aircraft Rental and Insurance Payouts

Wildlife conservation efforts often rely on specialized equipment, including aircraft, to protect endangered species and monitor vast landscapes. But when a Public Benefit Organization (PBO) owns an aircraft and rents it out for conservation purposes, how does this impact tax and VAT obligations?

A recent case involving a PBO in South Africa raised important tax questions:

• Is income from hiring out the aircraft exempt from tax?

• Should VAT be declared on an insurance payout after the aircraft was written off?

This article breaks down the tax treatment of PBO aircraft rental and insurance claims, ensuring compliance while supporting conservation efforts.