Private nursery school - Is this a tax exempt organisation?

[J7J]

Hi,

Does a privately owned an run nursery school qualify to be tax exempt and if so, how?

Thanks!

[HR Solutions]

As far as I know they are not tax exempt. Not sure why they should be because they charge private rates and are making a profit ??

[Mynhardt]

It would not be exempt for tax.
I am assuming private nursery school operates for gain/self-interest. This is contrary to any public benefit activity.

If the nursery school is a charity, with no profit motive, it might qualify as carrying on a public benefit activity (see the 9th schedule to the income tax act where public benefit activities are listed).

Note that just because an entity carries on a public benefit activity and has no profit motive/self-interest, doesn't mean it is automatically exempt from tax.
The S10(1)(cN) exemption from income tax only applies to approved (by SARS) public benefit organisations which comply with the record keeping and administrative requirements of S30 of the income tax act.

[J7J]

Thank you!