If you run or are starting a non-profit, church, or NGO in South Africa, you’ve probably come across the term PBO — and wondered exactly what it means and whether you need it. So, what is a PBO? In short, it’s a Public Benefit Organisation approved by SARS for tax exemption. This guide explains what a PBO is, how it differs from an NPO and an NPC, the benefits, and how to register.
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📋 Table of Contents
What Is a PBO?
A PBO (Public Benefit Organisation) is an organisation approved by the SARS Tax Exempt Unit under the Income Tax Act because it carries on approved public benefit activities — such as welfare, health care, education, religion, or conservation. Once approved, a PBO becomes exempt from income tax on the funds it uses for those activities.
Importantly, “PBO” is a tax status granted by SARS — not a type of organisation you register at CIPC or the Department of Social Development. Your organisation must first exist as a legal non-profit entity, and then apply to SARS for PBO status.
PBO vs NPO vs NPC — What’s the Difference?
These three are often confused. Here’s how they differ:
In practice, many organisations are an NPO or NPC and apply for PBO status to unlock tax exemption.
Benefits of PBO Status
- Income tax exemption on funds used for public benefit activities
- Access to funding and grants — many funders only support registered PBOs
- Credibility with donors, government, and the public
- Possible Section 18A status, allowing donors to claim tax deductions (see below)
PBO Status and Section 18A
Section 18A is often confused with PBO status. Being a PBO means your organisation is tax exempt. Section 18A is a separate approval that lets your donors claim a tax deduction for donations they make to you. Only PBOs carrying on specific approved activities (like education, welfare, or health care) qualify for Section 18A — many PBOs, including most churches, are tax exempt but do not hold 18A status.
Who Can Apply for PBO Status?
To apply for PBO status, your organisation must:
- Be a non-profit legal entity — an NPC, a trust, or a voluntary association
- Carry on one or more approved public benefit activities
- Have at least three unrelated persons accepting fiduciary responsibility
- Not distribute profits to members — all income must further its objectives
- Have a founding document (MOI or constitution) with the required tax-exemption clauses
How to Register a PBO
- Register your legal entity first (NPC, trust, or association).
- Prepare a compliant founding document with the required tax-exemption clauses.
- Complete the SARS EI1 application for tax exemption (and EI2 for Section 18A if applicable).
- Submit to the SARS Tax Exempt Unit with supporting documents.
- Receive your PBO number and tax-exemption approval.
The SARS approval process can take several weeks to a few months, and applications are frequently delayed by incorrect founding documents — which is why many organisations use a professional service.
Let Bekin Register Your PBO
We handle the full PBO application with SARS — from getting your founding document right to submitting your EI1 (and EI2 for Section 18A where you qualify) — so your organisation becomes income tax exempt without the back-and-forth.
Get PBO tax-exempt status
We register your PBO with SARS so your organisation stops paying income tax on its funds.
📞 Call us: 021 525 9615 · 💬 WhatsApp: 076 289 0153 · ✉️ sales@bekinconsulting.co.za
Need the entity first? We also handle NPO registration, church registration, and trust registration.
Frequently Asked Questions
A PBO, or Public Benefit Organisation, is an organisation approved by the SARS Tax Exempt Unit because it carries on approved public benefit activities such as welfare, health, education or religion. Once approved, a PBO is exempt from income tax on the funds it uses for those activities.
An NPO is a Non-Profit Organisation registration with the Department of Social Development, while a PBO is a tax-exempt status granted by SARS. Many organisations are registered as an NPO or NPC and then separately apply for PBO status to become income tax exempt.
Not automatically. PBO status makes your organisation tax exempt, but donors can only claim a tax deduction if you also hold Section 18A approval. Only PBOs carrying on specific approved activities qualify for Section 18A, so many PBOs are tax exempt without it.
To apply for PBO status your organisation must be a non-profit legal entity such as an NPC, trust or voluntary association, carry on approved public benefit activities, have at least three unrelated fiduciaries, and have a compliant founding document. Bekin Consulting can handle the full SARS application for you.
