Accounting and Tax Blog

PROVISIONAL TAX

  Gavin Bacon   Jul 28, 2015   Accounting & Tax Information   0 Comment

WHAT IS PROVISIONAL TAX?

provisional tax 2015Provisional tax is not an additional or separate tax. It ensures that the taxpayer does not have to pay large amounts all at once, as the tax due is spread over the relevant year of assessment. Even though the amount is spread over the year, it still requires taxpayers to pay a minimum of 2 amounts in advance, these amounts are based on an estimated taxable income.

AIM OF PROVISIONAL TAX

The aim is to help taxpayers meet their liabilities in the form of two payments, instead in one large amount at the beginning or end of the tax year.

WHO PAYS PROVISIONAL TAX?

You are a provisional tax payer if:
  • You receive an income in any form besides a salary e.g. rental income or interest income
  • You are a person, not a company, who receives income other than remuneration or an allowance or advance
  • The Commissioner has told you or your company that you are a provisional taxpayer.
  • Companies are automatically put into the provisional tax system.

 

You are not a provisional tax payer if you are:
  • An approved public benefit organisations or recreational club
  • A body corporate, share block company or certain associations of persons
  • Non-resident owners e.g. Owners/charterers of ships or aircrafts.
  • There are age specifics and income specifics that exempt certain individuals from provisional tax.

WHAT STEPS MUST I TAKE TO WORK OUT THE AMOUNTS DUE?

The amount of provisional tax payable is worked out on the estimated taxable income for that particular year of assessment. See details of how this is worked out, on the SARS website.

HOW SHOULD IT BE PAID?

There is no registration/deregistration needed to be a provisional taxpayer. If a taxpayer is liable for provisional tax they need to submit an IRP6 return form.

HOW DO I SUBMIT MY FORM?

  1. You can register for SARS eFiling – this will ensure a fast turnaround time for assessment and refund payments.
  2. If you are already an eFiler, you just need to add “provisional tax” to your profile so that you can access and file your form online.
  3. Alternatively you can call the SARS Contact Centre on 0800 00 SARS (7277) to ask for your form. They will explain the process to you. You can also visit your nearest SARS for the staff to help you on site.
  4. Contact DATC (Durban Accountants and Tax Consultants) for assistance with your Provisional tax.

WHEN SHOULD IT BE PAID?

Your first provisional tax instalment should be done in the first six months of the tax year. The second payment cannot be done later than the 28th of February. Your third payment is voluntary.

REMEMBER! –  “Late submission could lead to you being charged with penalties and interest”.

Information source: http://www.sars.gov.za/Pages/default.aspx

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