Tax help for Recreational Club

[eitai2001]

Hi.

Myself and a friend are looking at starting a South African rectreational club for young aviators.

Would any of you be willing to help us with the tax implications, advice and registering with SARS, but for free as we cannot afford to pay for the services.

Regards

Itai

[garthu]

Are u a pilot?? Interesting, might also be interested in the club... just not so young anymore (plenty at heart!)

[eitai2001]

No, unfortunately not yet ... but one day when I've got my degree and can pay for my schooling.

Well We're looking at a broad use of the word youth to include 12 - 30.

[sgafc]

Hi.

Myself and a friend are looking at starting a South African rectreational club for young aviators.

Would any of you be willing to help us with the tax implications, advice and registering with SARS, but for free as we cannot afford to pay for the services.

Regards

Itai

Hi

Register your recreational club, as an NPO at Social Services first, then follow up with a Tax Exemption Registration at the Tax Exempt Unit, in Pretoria.
The Tax Exempt Status will entitle your donors to a section 18 tax deduction(incentive)

Here is the catch however, tax exempt status, in no way implies that you will never pay tax on the NPO. Donations, grants and membership fees are tax exempt, but all your trading receipts(fundraisers etc), will attract tax!

Good Luck

[eitai2001]

I found a tax handbook for recreational clubs that says that certain incomes and recepits are tax exempt, such as selling cold drinks off the premises

[sgafc]

Coldrinks are taxable receipts, anything beyond your fees and donations will attract tax. There are however tax exempt thresholds for your trading receipts as well, and like a normal business, expenses in production of trading receipts are tax deductible.

[Dave A]

Here is the catch however, tax exempt status, in no way implies that you will never pay tax on the NPO. Donations, grants and membership fees are tax exempt, but all your trading receipts(fundraisers etc), will attract tax!

I recall we hit this issue in an NPO I had dealings with a couple of years ago.

You are allowed a percentage of trade income (25% rings a bell, but don't rely on that). But the rest had to be made up of subscriptions and donations.

Fundraising activities was an interesting aspect which we looked at quite closely too. For example, I established that the proceeds of the annual convention of the NPO was not deemed as taxable receipts. However, something like a tuckshop would attract the taxman's interest.

[sgafc]

A Non-Profit Organisation, cannot rely on its "Non-Profit" status, when it starts engaging in activities that are in competition with profitable entities, that are taxed on their profits. Thus the test would be what constitutes competition with taxpaying organisations. (Selling).

[Sieg]

Hi.

Myself and a friend are looking at starting a South African rectreational club f

Itai

I think first things first: If you want to start the club, then it needs to be properly constituted. This is done by preparing and signing the constitution of the club at its inaugural meeting. SARS will probably ask for a copy of the constitution.

Sieg

[eitai2001]

I think first things first: If you want to start the club, then it needs to be properly constituted. This is done by preparing and signing the constitution of the club at its inaugural meeting. SARS will probably ask for a copy of the constitution.

Sieg

Hi.

Yes, we are busy gathering a group of people who we want to be in the committee. We will then write a constitution we all agree on and sign it.

Regards

Itai