What is provisional tax?
Provisional tax is not separate from income tax but is simply a means of paying your income tax liability during the year of assessment, instead of owing a large tax liability when you submit your income tax return during Filing Season. Provisional tax is therefore an advance payment of a taxpayer’s normal tax liability.
Who should pay provisional tax?
Provisional taxpayers are those who receive income other than their normal salary. If you receive any extra income such as rental income, interest income from investments, or other income from a trade, you are classified as a provisional taxpayer. However, exceptions can apply and a list of these exceptions can be found on the website.
Generally, the rule is if you only receive remuneration, then you are regarded as a non-provisional taxpayer. However, a person who receives remuneration can be liable for provisional tax if the remuneration is received from an employer who is not registered as an employer with SARS (for example, South Africans working for foreign embassies in South Africa).
When and how should it be paid?
A provisional taxpayer is required to make two provisional tax payments: at the end of the first six months into the year of assessment (August) and on the last working day of the year of assessment this year it would be February 26, 2021).
This is for taxpayers with the year of assessment ending February. Taxpayers can choose to make an additional provisional payment, which is generally known as the third or top-up payment, after the end of the year of assessment in order to reduce liability for the interest that would arise should their first two provisional payments be inadequate.
For taxpayers with the year of assessment ending February, the additional provisional tax payment must be made on or before September 30. Provisional taxpayers are also required to submit an income tax return during the annual filing season.
Provisional tax liability is calculated on estimated taxable income, including current taxable capital gains, for that particular year of assessment. These estimates of taxable income are submitted to SARS on an IRP6 return.
The normal tax payable on the estimated taxable income is calculated at the relevant rate of tax for that respective year of assessment. Provisional tax returns are mandatory if you meet the definition of a provisional taxpayer.
A provisional taxpayer must submit an IRP6 return, even if the end result reflects no provisional tax payable. An IRP6 return can be requested and submitted via the following channels:
- SARS eFiling
- A SARS branch
- The SARS Contact Centre on 0800 00 7277
Click here for more on Provisional Tax
Regional News
Scams:
According to SARS, our region is aware of a number of scams targeting taxpayers. SARS cautioned the public to be very careful when asked to make payments or to give out their personal information to anyone claiming to be from SARS. Click here for more information on these scams
SARS services during January and February:
South Africa has entered its second wave of the Covid-19 pandemic and SARS is taking every step possible to protect taxpayers and its employees.
SARS branches are currently closed for physical visits, but taxpayers can continue to make use of our digital offerings, including calling our Contact Centre on 0800 00 7277 or having virtual engagements with our agents.
Click here to make an appointment
You have the following options:
- A telephonic appointment where a SARS official will call you at an agreed time
- A video appointment where a video conference will be set up with a SARS official at an agreed time
Check the various media channels for updates on SARS branch closures.
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SARS apologises for the disruption in services brought about by the worldwide termination of support of the Adobe Flash platform on January 12, 2021. If you are currently experiencing these issues, click here. SARS is working on resolving these issues as soon as possible.
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