Provisional tax is a method of paying the income tax liability in advance so that you don’t have a large tax debt come tax assessment. This means that the tax liability is spread over the year of assessment and where you are required to pay at least two amounts in advance, during that year. 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 offset against the liability for normal tax for the applicable year of assessment.
Any person who receives income other than a salary is a provisional taxpayer. If you earn non-salary income, such as rental income from a property, interest income from investments or other income from a trade or small business you run, you will be a provisional taxpayer.
Companies automatically fall into the provisional tax system.
It is important to note that 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 via eFiling.
How to pay:
- If you do not have eFiling, register for SARS eFiling. From eFiling, request an IRP6 return, make your submission and payments online.
- If you are already an eFiler, simply add provisional tax to your profile so that you can access and file your IRP6 return online.
- Ask one of our team members to assist you in setting this up.
When to pay:
- The first payment must be made on/before 31 August.
- The second payment must be made on/before 28/29 February.
- The third payment is voluntary and may be made within six months of the year of assessment, or at end of September (seven months after tax season closes). This payment is ONLY payable if the amount paid in previous payments was insufficient.
Contact us today and let our capable people assist you in submitting your provisional tax return timeously and accurately.