CMV Group

Provisional tax is not a separate tax from income tax. It is a method of paying the income tax liability in advance, to ensure that the taxpayer does not remain with a large tax debt on assessment. Provisional tax allows the tax liability to be spread over the relevant year of assessment. It requires the taxpayers to pay at least two amounts in advance, during the year of assessment, which are based on estimated taxable income. A third payment is optional after the end of the tax year, but before the issuing of the assessment by SARS. On assessment the provisional payments will be off-set against the liability for normal tax for the applicable year of assessment.

Who is it for?

Any person who receives income (or to whom income accrues) other than a salary, is a provisional taxpayer. A provisional taxpayer is defined in paragraph 1 of the Fourth Schedule of the Income Tax Act, No.58 of 1962, as any –

  • natural person who derives income, other than remuneration or an allowance or advance as mentioned in section 8(1) or who derives remuneration from an employer who is not registered for employees’ tax (for example, an embassy is not obligated to register as an employer for employees’ tax purposes)
  • company; or
  • person who is told by the Commissioner that he or she is a provisional taxpayer.

Excluded from being a provisional taxpayer as defined are any –

  • approved public benefit organisations or recreational clubs that has been approved by the Commissioner in terms of s30 or s30A;
  • body corporates, share block companies or certain associations of persons;
  • Non-resident owners or charterers of ships or aircraft;
  • Any natural person who does not earn any income from carrying on any business – provided that person’s taxable income will not be more than the tax threshold (for 2019 tax year:  for taxpayers below age of 65 –  R78 150; age 65 to below 75 – R121 000 and age 75 and over – R135 300); or the taxable income of that person (earned from interest, foreign dividends, rental from letting of fixed property and remuneration from unregistered employer) will not be more than R30 000;
  • A small business funding entity; and
  • a deceased estate.

Note: Companies automatically fall into the provisional tax system. There is no longer a registration or deregistration process to be a provisional taxpayer. The onus is on the taxpayer to determine if he or she is liable for provisional tax, and to request and submit an IRP6 return.

If you have any further queries on provisional tax, please contact us on 012 991 4400 to speak to one of our Professional Accountants, or send an email to info@cmv.co.za.

This information is an extract from the SARS website (2019)

Leave a Reply

Your email address will not be published. Required fields are marked *

We use cookies to improve your experience on our website. By continuing to browse, you agree to our use of cookies
X