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Who does Provisional Tax affect?

Any person who receives income other than a salary is a provisional taxpayer. A provisional taxpayer is defined as any:

• Natural person who derives income, other than remuneration or an allowance or advance
• Company
• Person who is told by the Commissioner that he or she is a provisional taxpayer.

Excluded from being a provisional taxpayer as defined are any:

• Approved public benefit organisations or recreational clubs
• Body corporates, share block companies or certain associations of persons

Persons who are exempt from paying provisional tax, namely:

• Non-resident owners or charterers of ships or aircraft
• Any natural person who does not earn any income from carrying on any business. This is provided that person’s taxable income will not be more than the tax threshold for the 2017 tax year

There is no formal registration or deregistration needed to be a provisional taxpayer. If a taxpayer is liable for provisional tax, he or she merely needs to request and submit an IRP6 return via eFiling to SARS.

How do I 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 as shown below:

The First Period:

• Half of the total estimated tax for the full year
• Less the employees tax for this period (6 months)
• Less any allowable foreign tax credits for this period (6 months)

The Second Period:

• The total estimated tax for the full year
• Less the employees tax paid for the full year
• Less any allowable foreign tax credits for the full year
• Less the amount paid for the first provisional period

The Third Period (voluntary):

• The total tax estimated payable for the full year
• Less the employees tax paid for the full year
• Less any allowable foreign tax credits for the full year
• Less the amount paid for the 1st and 2nd provisional tax periods

How should Provisional Tax be paid?

SARS has introduced changes to provisional tax that affect the way in which provisional taxpayers file their IRP6 returns. With most provisional taxpayers making their submissions electronically, SARS will no longer post out (mail) IRP6 returns to provisional taxpayers nor can it be downloaded on the SARS website. You will now be asked to send your IRP6 using one of the methods below:

• Register for SARS eFiling online. The eFiling facility allows you to ask for your IRP6 return and make your submission and payments online, and ensures you get fast turnaround times for assessment and refund payments
• If you are already an eFiler, simply add provisional tax to your profile so that you can access and file your IRP6 return online
• You can call the SARS Contact Centre to ask for an IRP6 return or find out more about the new Provisional Tax process
• Visit a SARS branch nearest you and they will be able to help complete and issue your form electronically.

When should Provisional Tax be paid?

• The first provisional tax payment must be made within six months of the start of the year of assessment for 31 August or six months after the approved financial year end date.
• The second payment must be made no later than the last working day of the year of assessment ending 28/29 February.
• The third payment is voluntary and may be made:
• Within seven months of the year of assessment, where the year of assessment ends in February, which is 30 September
• Within six months of the year of assessment, in any other case.

Please remember that late submissions could lead to you being charged with penalties and interest by SARS.