PROVISIONAL T A X
S.A. PROVISIONAL TAX
| PROVISIONAL T A X | ||||
| All provisional taxpayers are required to remit two provisional tax payments | ||||
| a year. A third voluntary payment may be required to avoid interest being charged. | ||||
| First Year of Assessment | ||||
| Where a taxpayer has not been assessed previously, a reasonable estimate of the taxable income must be made. The | ||||
| basic amount cannot be estimated at nil as was previous practice, unless fully motivated. | ||||
| . | ||||
| First Payment | ||||
| One half of the total tax in respect of the estimated taxable income for the year is payable six months before the | ||||
| financial year end. The estimate of taxable income must not be less than the taxable income reflected on the latest | ||||
| assessment. A lower estimate may be used if justified, subject to the consent of SARS. | ||||
| Second Payment | ||||
| The balance of tax due is payable on or before the last day of the financial year end in respect of the estimated taxable | ||||
| income for the year. For purposes of the second payment, the estimate may not be less than the taxable income reflected | ||||
| on the latest assessment or 90% of the taxable income as finally determined. If the above requirement is not met, | ||||
| a penalty of 20% of the provisional tax underpaid may be imposed. | ||||
| Third Payment | ||||
| Third provisional payments are only applicable to individuals and trusts with taxable income in excess of R50 000 and | ||||
| companies and close corporations with taxable income in excess of R20 000. Such payments should be made before | ||||
| 30 September in the case of a taxpayer with a February year end and within six months of other year ends to avoid | ||||
| interest being charged. | ||||
| Capital Gains | ||||
| Capital gains are not included in provisional tax estimates for the first and second period and will therefore not affect the | ||||
| basic amount used for provisional tax purposes. If however an estimate lower than the basic amount is used, Capital | ||||
| gains must be included. Capital gains must however be included in the final calculation for the third provisional tax payment. | ||||
| Estimates | ||||
| SARS has the right to increase any provisional tax estimate to an amount they consider reasonable. | ||||
| Persons over 65 | ||||
| Persons over 65 years whose taxable income does not exceed R80 000 are exempt from provisional tax, provided that | ||||
| such income consists exclusively of remuneration, rental, interest or dividends. | ||||
| Persons under 65 | ||||
| Persons under 65 years who do not carry on business, and whose taxable income will not exceed the tax threshold | ||||
| or whose interest, foreign dividends and rental will not exceed R10 000 are exempt from provisional tax. | ||||
| Directors of Private Companies | ||||
| As from 1 March 2006 the specific inclusion of directors of private companies in the definition of a provisional taxpayer has | ||||
| been deleted. | ||||
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