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Taxation for Not-for-Profit Organisation

id : 58   cat : Business Tax   
Good morning CPAs, have a burning question.

I work for a community based special school. Since it began in 2007 it has never filed annual returns. PAYE deductions are in order.

We are in the process of registering the school as a trust and so far the trust deed is registered awaiting the Certificate. Reason to transit from a CBO to a trust is for easier application for an exemption using the same name for the school.

What possible risk could we encounter when applying for the tax exemption and how would our previous history affect us.

Please advice.
Asked by : Margaret Wambu
 DOQ : 2016-08-08 07:28:00
   Margaret Wambu

Answer

TAX EXEMPTION

The FIRST SCHEDULE (Income Tax Act Cap 470) lists institutions & types of income exempt from income tax.

PARAGRAPH 10 of the same SCHEDULE deals with conditions for a Not-for-Profit entity to qualify.

First, under the Fist Schedule there is no requirement for an entity to be registered in any particular form. Hence the form of registration MAY not be relevant for determination of tax exemption.
Answered by : Admin
 DOA : 2016-08-08
   Admin
Comments
Thanks a lot.
   Margaret Wambui    Margaret Wambui  2016-08-08 09:24:00
TAX EXEMPTION : Application procedures. The key requirements are 1-Audited accounts 2- proof of the said activities & 3- finally KRA may insist on performing a tax audit. check this link as well : http://www.revenue.go.ke/index.php/notices/kra-news/incom
   John Muiruri    John Muiruri  2016-08-08 12:04:00
Thanks a lot this infor will really help
   Margaret Wambui    Margaret Wambui  2016-08-08 12:09:00
You are welcome.
   John Muiruri    John Muiruri  2016-08-08 12:10:00


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