What is a provisional taxpayer?

The South African Revenue Service, in 2010, made changes to the process that is to be used by ‘Provisional Taxpayers’. The new process includes new IRP6 forms, processes for filing and E-Filing of provisional tax, and requirements.

 

Provisional taxpayers differ from regular taxpayers in that provisional taxpayer status is awarded to anyone that receives an income other than remuneration in the form of a salary or wage. Income such as house rental, investment return, interest returns, etc., all get placed under provisional tax, even if the taxpayer also receives a salary. The Provisional Taxpayer status is automatically assigned to companies.

 

Provisional taxpayers are required to make two payments through the course of the year, with a third payment being optional at the end of the tax year.

 

The calculation of payable tax for each period is as follows (according to the SARS website):

 

• The First Period: (Payable with in the first six months of the year of assessment)

◦ Half of the total tax for the full year;

◦ Less the employees tax deducted for this period (6 months);

◦ Less any allowable foreign tax credits for this period (6 months).  

 

• The Second Period: (No later than the last working day of the year of assessment)

◦ 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 period.

 

• The Third Period (voluntary):

◦ The total tax 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.