PROVISIONAL TAX IN SOUTH AFRICA
Any individual who earns an income other than, or in addition to, a salary is a provisional taxpayer. Companies are also considered to be provisional taxpayers. There are, however, exemptions for individuals who earn income from other sources, such as:
- Income in a tax free savings account;
- Individuals under 65 years of age who earn interest not exceeding R23 800 for the tax year;
- Individuals under 65 years of age whose taxable income is less than R79 000, the taxable threshold, for the tax year; and
- Individuals 65 years of age and older who receive interest of less than R34 500 for the tax year.
Provisional tax is paid to SARS in advance, twice a year, to mitigate the risk of the taxpayer sitting with a large tax debt on assessment. The first provisional tax payment occurs in August and the second occurs in February. There is also an option for provisional taxpayers to make a third payment at the end of September, if the amount paid during August was incomplete. This provides the taxpayer with the opportunity to spread the liability over the year of assessment.
Provisional taxpayers need to register as a provisional taxpayer with SARS and submit an IRP6 during each payment cycle.
CMV Taxation can assist
Calculating the amount of provisional tax payable can be an intricate process and may require the skills of a qualified tax practitioner.
Charl Mocke and Riaan du Toit are Master Tax Practitioners and have completed a Master’s Degree in Taxation. They can assist you with all aspects of taxation, including:
- Personal tax
- Corporate tax
- International tax planning
- Property tax planning
- Employees’ tax (PAYE)
- Capital Gains Tax (CGT)
- Donations tax
- Income tax
- Estate duty
- Residence based tax
- Expatriate tax
- Employee share incentives
- Exit planning
For more information, or to request assistance, please contact us on info@cmv.co.za or 012 991 4400.
This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)