SARS Updates the Rules on Hosting International Events as a PBO (IN 122)
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On 27 March 2026, SARS published Interpretation Note 122 (Issue 2), replacing the original version from August 2022. If you advise non-profit clients, event organisers, professional associations, or any entity involved in large-scale international gatherings, this update is worth your attention.
What IN 122 Is About — and When It Applies
Paragraph 11(b) of Part I of the Ninth Schedule to the Income Tax Act allows an organisation that bids for or hosts an international event to apply for Public Benefit Organisation (PBO) status, unlocking exemptions from income tax, capital gains tax, donations tax, dividends tax, and transfer duty. Two prcocesses must be passed.
First, the Minister of Finance must approve the specific event, based on the extent of foreign participation and the economic impact on the country as a whole.
Second, SARS must approve the organising entity as a PBO under section 30. The entity must be a non-profit company, trust, or association of persons, with the bid or hosting as its sole or principal object.
Qualifying events are deliberately broad: sporting competitions, conferences, summits, trade fairs, exhibitions, and expos — as long as the event takes place in South Africa and includes genuine foreign participation.
One important rule that hasn't changed: donations to a PBO carrying on PBA 11(b) are not tax-deductible under section 18A. PBA 11(b) sits in Part I of the Ninth Schedule only — not Part II. No section 18A receipts may be issued, and donors cannot claim a deduction. As covered in our article on the new section 18A receipt rules from 1 March 2026, this distinction matters, particularly for event organisations that may mistakenly offer donors a tax benefit.
What Changed in Issue 2
The law has not changed. What SARS has done is improved the practical usefulness of the note, updated it to reflect current legislation, and added detail that was absent from the 2022 version. Four changes stand out:
Updated OECD references. Issue 2 anchors the definition of "international event" to The OECD Recommendation on Global Events and Local Development. This aligns South Africa's interpretation with current international standards, useful for events seeking to demonstrate global credibility in their application.
Expanded application requirements. Section 7 is now more detailed and specific. Applicants must provide comprehensive venue descriptions, income and expenditure projections, a fully motivated economic impact explanation, and substantiating evidence of foreign participation. The bar for a sufficient application is higher and clearer.
Objection period updated from 30 to 80 business days. This is the most operationally significant change for practitioners. Issue 1 referenced the old 30-day rule. Issue 2 correctly reflects the amended Rule 7(1), which extended this to 80 business days with effect from 10 March 2023. If you or your clients have been operating on the old 30-day assumption, correct this now.
New Annexure B with worked examples. This is the most practically useful addition. Two detailed examples, the 2005 World Petroleum Congress and the 2013 Africa Cup of Nations, show exactly how organisations successfully motivated their applications, what supporting information was provided, and how the Minister applied his discretion. For any client preparing an application, these examples serve as an invaluable template.
What This Means for Your Practice
This provision surfaces in specific, high-value scenarios: a professional association bidding to host a continental conference, a sports federation establishing a local organising committee, a municipality partnering with a private body to host a trade expo. When it does arise, the stakes are material. A qualifying PBO structure can deliver full income tax exemption on potentially tens of millions of rands in receipts, but only if the application is correctly structured and Ministerial approval is obtained.
