Tax Exemption Guide for Public Benefit Organisations in South Africa (Issue 4) 51
Annexure B – Section 10(1)( cN) of the Income Tax Act, 1962
10. Exemptions. —(1) There shall be exempt from normal tax —
(c N) the receipts and accruals of any public benefit organisation approved by the
Commissioner in terms of section 30(3), to the extent that the receipts and accruals
are derived—
(i) otherwise than from any business undertaking or trading activity; or
(ii) from any business undertaking or trading activity —
(aa) if the undertaking or activity —
(A) is integral and directl y related to the sole or principal object of that
public benefit organisation as contemplated in paragraph (b ) of the
definition of “public benefit organisation” in section 30;
(B) is carried out or conducted on a basis substantially the whole of
which is directed towards the recovery of cost; and
(C) does not result in unfair competition in relation to taxable entities;
(bb) if the undertaking or activity is of an occasional nature and undertaken
substantially with assistance on a voluntary basis without compensation;
(cc) if the undertaking or activity is approved by the Minister by notice in the
Gazette , having regard to —
(A) the scope and benevolent nature of the undertaking or activity;
(B) the direct connection and interrelationship of the under taking or
activity with the sole or principal object of the public benefit
organisation;
(C) the profitability of the undertaking or activity; and
(D) the level of economic distortion that may be caused by the tax
exempt status of the public benefit organisation carrying out the
undertaking or activity; or
(dd) other than an undertaking or activity in respect of which item ( aa), (bb) or
(cc) applies and do not exceed the greater of —
(i) 5 per cent of the total receipts and accruals of that public benefi t
organisation during the relevant year of assessment; or
(ii) R200 000;