Tax Matters

3 October 2005
PP Winston Simpson, Co-ordinator for Tax Exemption for D9320 writes...

CLUBS WHO HAVE RECEIVED TAX EXEMPTION AND THEIR TAX NO:

	As requested have you submitted reasons to the Tax Exemption Unit (TEU) why you are not registered for the items under 2.6 of the letter you received from the TEU, e.g. you don't employ staff who manufacture or sell a service etc.
	Item 2.7 of the same letter requires you to register as a NPO within 12 months.
	As soon as you have completed your financial statements for the year and had them audited send a copy to the TEU.
	The TEU are also sending out tax forms for completion, IT12E1 - Return of Income for Exempt Institutions. I have looked through these and the information requested can be extracted from you set of financials - e-mail me if you have a problem filling it in.
	Remember the TEU require a set of financials i.e. Income and Expenditure and Balance Sheet, a cash flow statement is not sufficient.
	Remember to advise them if your Public Officer (normally your treasurer) has changed - full names and contact details.

To register as a NPO: (For those clubs that have not already done this)

On the internet go to www.socdev.gov.za and double click on Documents > Non-Profit Organisations > NPO Documents > NPO Application Form (print out) > NPO Narrative Report (print Out).

Double click on Registration Process - take note of the steps to be taken. The reference to "founding documents" - your Club's Bylaws and Rotary's Constitution.

Application form must be filled in and sent to:-
Directorate
Non-Profit Organisations
Department of Social Development
P/Bag X901
Pretoria 0001

The laborious part about filling in this form is that they ask a number of questions and you have to cross-reference them to the page in your bylaws and Constitution that answers their question. If you need to comply then you must amend your bylaws, the Constitution cannot be changed. This might require you to add the following to your club's bylaws:-

Article XIV – Body Corporate
The Club shall –

exist in its own right separately from its members;
continue to exist even when its membership changes and there are different office bearers;
have the power to acquire and own movable and immovable property and to dispose thereof;
be able to sue and be sued in its own name.

Article XV – Powers
The Club shall have all such powers as it needs in order that it is able to achieve its objects as set out in Article 4 of the Constitution of the Club, including, without limiting the generality of the aforegoing the power to open and operate bank and investment accounts, the power to lend and borrow money upon security or otherwise.

Article XVI – Limited liability
Members and office-bearers of the Club shall not be liable for any of the debts or liabilities of the Club solely by virtue of the fact that they are members or office-bearers thereof. Nor shall they be liable to any person for any damages suffered by that person as a result of any act or omission by them which occurs in good faith while such member or office bearer is acting on behalf of the Club.

Every 12 months you have to submit to Social Services a report and the Narrative Report you printed out gives you guidelines as to the format that this report must take.

Any queries pertaining to South African Tax should be addressed directly to PP Winston Simpson.