Description
Where an
individual earns taxable income that is not subject to SITE or PAYE deductions
(e.g. interest, rental or business income), he or she has to pay provisional
tax on this income. Provisional tax payments are made on a six-monthly basis.
Provisional
tax is intended to help taxpayers meet their tax liabilities on an on-going
basis as opposed to paying a big amount once a year on assessment. The
provisional tax paid will be offset against the final tax liability (normal
tax) that the individual has to pay for the relevant year of assessment.
A person who
becomes liable for the payment of provisional tax must, within 30 days of
becoming liable, apply in writing for registration at the local branch office
of the South African Receiver of Revenue (SARS). Failure to do so will result
in interest and penalties being levied on late payments and additional tax for
the late submission of returns.
The due date
for payment of the second provisional tax period is not later than the last day
of the year of assessment or approved financial year-end date.
Note: (applicable to
Individuals and trusts only)
Where a
February financial year-end creates financial hardship and approval has been
obtained from SARS to submit financial statements to a date other than the end
of February, such persons may also request approval to submit provisional tax
returns in line with the approved financial year-end. All other income however
remains in the year of assessment ending 28/29 February.
Calculate
provisional tax as follows as follows for the second period:
- the total estimated tax for
the full year
- less the employees tax paid
for the full year
- less the any allowable
foreign tax credits for the full year
- less the amount paid for the
first period.