I'll load this info on git as well, in the 'admin' folder, as a .txt. file. (Unrelated; I also saw him for my own stuff, and I'm in the green :D )
I forgot to ask if an international company can register a local company; we'll have to figure out who's company this should be, then I'll follow up. I wouldn't dally with this too long, let's get the paperwork sorted soonish.
Matthew Walton & Associates
Spoke to Ben King
1 July 2015
He understood what Debian is (yay!) and said that a conference would not fall in any public benefit organisation (PBO) category. This means that paying tax will be inevitable.
Registering as a company is best (not as a trust, for example).
He explained the difference between sponsor and donation:
Donation is gratuitous disposition, and taxed at 40% (I think, but it is taxed).
Sponsor is like a transaction, where both parties receive benefit. This is counted as income, and taxed (the sponsor is taxed), but the amount of tax depends on the turnover of the company.
If our turnover is around R2million, which is ballpark what I expect, the best thing is to register a Small Business Corporation. This will cost around 28% tax per annum [1] (we get taxed). We won't have shareholders, so we don't have to worry about dividend tax.
IF we can make sure that the local funds remain at an annual turnover of less than R1 million, then we qualify for registering as a Micro Business, which means we only have to pay around 3% tax [1]. So, only manage the local sponsors in the local company, and use international sponsors to pay international costs (e.g. flights), as far as possible.
The next steps would be to draft the founding documents, draw up a memorandum of agreement, register the company (at CIPC [2]), and then apply to SARS, the South African Revenue Service.
He says this is all pretty straightforward, and there is no problem creating and then dissolving a company.
For what it's worth, PBO's qualify for tax-deductible donations for the sponsors [3], so that would be nice. But he is adamant we don't apply, and think it would be an unnecessary risk to ask another PBO to carry us, because if they get audited then they might lose their PBO status.
For more information, see Schedule 9 of the income tax act (I found this nifty long site [4]), Section 30 gives the definition of a PBO [5]. I get a bit confused, but Section 18 is somehow also relevant (and gives much the same info) [6]. If we qualified anywhere, it would be in Education, which I've copied below.
But this is not really relevant, so don't worry about this.
PBO: Education:
4) Education and Development
a) The provision of education by a "school" as defined in the South African Schools Act, 1996, (Act No. 84 of 1996).
b) The provision of "higher education" by a "higher education institution" as defined in terms of the Higher Education Act, 1997, (Act No. 101 of 1997).
c) "Adult basic education and training", as defined in the Adult Basic Education and Training Act, 2000, (Act No. 52 of 2000), including literacy and numeracy education.
d) "Further education and training" provided by a "public further education and training institution" as defined in the Further Education and Training Act 1998, (Act No. 98 of 1998).
e) Training for unemployed persons with the purpose of enabling them to obtain employment.
f) The training or education of persons with a permanent physical or mental impairment.
g) The provision of bridging courses to enable indigent persons to enter a higher education institution as envisaged in subparagraph (b).
h) The provision of school buildings or equipment on land owned by either the State or an organisation approved in terms of section 30 of the Income Tax Act, 1962, carrying on activities as envisaged in subparagraphs (a) to (g).
i) Career guidance and counseling services provided to persons attending any school or higher education institution as envisaged in subparagraphs (a) and (b).
j) The provision of hostel accommodation to students of an organisation approved in terms of section 30 of the Income Tax Act, 1962, carrying on activities envisaged in subparagraphs (a) to (g).