Updated Tax Exemption Guide for Institutions, Boards or Bodies
SARS has issued an updated version (Issue 2) of its Tax Exemption Guide for Institutions, Boards or Bodies on 25 March 2025, offering simplified, clearer guidance on how these entities can qualify for tax exemption under section 10(1)(cA)(i) of the Income Tax Act.
What’s New?
The guide has been refreshed to help accountants and tax practitioners understand:
Who qualifies: The guide explains how institutions, boards or bodies established by or under South African law may qualify for exemption, provided they engage in certain public-benefit or support functions (like research, providing public services, or promoting agriculture or industry).
What activities count: Eligible entities must carry out prescribed activities—such as scientific research, offering services to the public or state, or supporting commerce or agriculture—in support of their main purpose.
Donor benefits: If the organisation also conducts approved public benefit activities, it may qualify under section 18A, allowing donors to claim tax deductions for donations.
Why This Matters for Accountants
If your clients operate statutory bodies, research councils, or public-benefit organisations, this guide is a must-read. It impacts:
Eligibility for income tax exemption
Treatment of donations and issuing section 18A receipts
Compliance with other taxes (PAYE, VAT, etc.)
Record-keeping and application procedures
📌 Tip: Make sure your client’s founding document or enabling legislation aligns with SARS’s prescribed requirements. Also, remember that no distributions of any amount are allowed—otherwise, the exemption could be withdrawn.
