Exempt Institutions and Submission of Annual Returns (IT12EI)

Exempt Institutions and Submission of Annual Returns (IT12EI)

• 14 September 2023
• Tax Administration
• SARS

All Exempt institutions MUST annually submit an IT12EI – Return of Income Tax Exempt Organisations – External Form income tax return.

The income tax return enables the Commissioner to determine:

• The tax liability of a partially exempt Tax Exempt Institution (EI); and
• Whether the approved EI is operating within the prescribed legal parameters of the relevant approval granted.

The following fields are required when completing the IT12EI:

• Particulars of organisation
• General Financial Information (even if there is no income tax liability)
• Information in Respect of Trading Activities (if applicable)
• Taxable Income / Loss (if applicable)
• Tax Deductible Receipts Issued in Respect of Donations (Section 18A) (for approved Section 18A tax exempt institutions)
• Additional Information.

If your approved Tax Exempt Institution was dormant for the year of assessment, please indicate “Y” under the “Additional Information” section of the IT12EI. Tax Exempt Institutions are also required to indicate if the dormant organisation has any assets or reserves.

The return for companies or other entities must be completed and submitted within 12 months of the financial year end of the exempt institution. Returns for trusts must be completed and submitted annually by the due dates announced by the Commissioner as set out in the annual notice issued.

NOTE: SARS reserves the rights to audit all IT12EI returns submitted by approved Tax Exempt Institutions, whether active or dormant.

NOTE: Returns must be submitted regardless of the exempt status, and even if there is no tax liability. NO NIL returns may be submitted unless it is supported by the necessary documents to show that there has been no economic activity, such as your bank statements.

Helpful Hints:

1. Organisations that have applied for income tax exemption but have not received an outcome should file a normal tax return dependent on their legal entity type, e.g., ITR14 (NPC and Voluntary Association) or IT12TR (Trusts).
2. Approved tax-exempt organisations are not considered provisional taxpayers but are required to submit tax returns as prescribed by the Commissioner of SARS.
3. If returns are not submitted on time, the exempt institution will be liable for administrative penalties, and will be required to pay administrative penalties incurred.

The TEI Segment will be providing more information on the submission of returns in the coming months.

Source: SARS

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