PBO Status and NPO Compliance
Following our recent update on SARS enforcement, one of the most serious risks organisations are facing is the potential withdrawal of their PBO status.
With that in mind, we felt it was important to share some practical guidance on the areas NPOs should be reviewing now, so that gaps in compliance can be identified and addressed early.
The implications of this are significant, and in many cases, the issues leading to it are not major failures, but smaller compliance gaps across a few key areas.
To reduce this risk, organisations would need to ensure that the following areas are up to date, accurate, and properly aligned:
Income Tax Submissions (IT12EI)
This requires confirming that all historical returns have been submitted correctly and on time.
In practice, this means:
- Reviewing prior years to identify any outstanding returns
- Verifying that submissions were accepted and processed by SARS
- Ensuring consistency between submitted returns and financial records
- Addressing any discrepancies or re-submissions where required
IT3(d) Reporting
This requires accurate donor-level Section 18A data for specific reporting periods.
To comply, organisations would need to:
- Review donor information to ensure the data is complete and accurate (names, ID numbers, donation details etc)
- Submit Section 18A data to SARS via the applicable IT3(d) channels
- Ensure all prior year IT3(d) is filed (1stsubmission period starting 1 March 2023)
Section 18A Certificates
Certificates and supporting records must be accurate and consistent.
This involves:
- Reviewing issued certificates for completeness and accuracy
- Ensuring all required donor information is captured
- Matching certificates to underlying donation records
- Correcting any inconsistencies between donor data, financial records, and issued certificates
Importantly, many of these are administrative compliance failures, not intentional wrongdoing.
General compliance with Section 30 of the Income Tax Act
This extends beyond submissions and into how the organisation operates and maintains its records.
To address this, organisations may need to:
- Review governance structures and compliance with PBO requirements
- Ensure financial and operational records are properly maintained
- Confirm that activities align with approved public benefit objectives
- Bring all compliance documentation into a structured and accessible format
Our message to you
Individually, each of these steps is manageable.
But in practice, they are all connected, as they rely on the same underlying data, records, and reporting processes.
And when multiple areas need to be reviewed and corrected at once, it becomes a time-intensive and detailed process, especially under pressure.
A simple question to consider:
If your organisation needed to address all of these areas within a limited timeframe, would you know where to start — and have the information readily available to do so?
At TPC, we’ve been assisting our NPO clients for the last 25 years to help ensure they maintain tax compliance.
If your organisation would like assistance in reviewing its compliance position, you can complete our NPO Needs Analysis linked below and we’ll guide you through the next steps. You can also contact us at admin@tpcsa.co.za if you would prefer to speak to us directly about how we can help take this responsibility off your hands.
“In today’s environment, compliance is no longer optional, it is foundational to the sustainability and credibility of your organisation.”