Provisional Tax

A provisional taxpayer is any person who earns income other than remuneration or an allowance or advance payable by the person's principal.

The following individuals are exempt from the payment of provisional tax:

• Individuals below the age of 65 who do not carry on a business and whose taxable income
  • will not exceed the tax threshold for the tax year; or
  • from interest, dividends and rental will be R20 000 or less for the tax year
• Individuals aged 65 and older if their annual taxable income
  • consists exclusively of remuneration, interest, dividends or rent from the lease of fixed property; and
  • is R120 000 or less for the tax year and is derived from remuneration, interest, dividends or rental from the letting of fixed property.

Definition of Remuneration

Remuneration means earning from employment (including annuities from pension, provident or benefit funds) but does not include income from investments, voluntary purchase annuities or annuities from a retirement annuity fund.

Definition of Taxable income

Total income (less allowable deductions) plus overseas income which is not taxable overseas (rule applies where less than 183 days in a foreign country)

Due dates for Provisional Returns

FIRST PROVISIONAL TAX RETURN

Due within the first 6 months of the tax year - 31 August (Applies to all individuals, juristic persons with a February year end and most Trusts)

SECOND PROVISIONAL TAX RETURN

Due before the end of the tax year - 28 February (Applies to all individuals, juristic persons with a February year end and most Trusts)

Actual Taxable income of R1 mill or less - estimate must be within 90% of final assessment

Actual Taxable income exceeds R1 mill - estimate must be within 80% of final assessment

THIRD PROVISIONAL TAX RETURN

Due on 30 September, seven months after the end of the tax year for February year ends.  (Applies to all individuals, juristic persons with a February year end and most Trusts).  Due six months after the end of the tax year, for year ends other than the end of February.

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. 

The basic amount is the taxable income of the latest preceding year of assessment increased by 8% p.a if the assessment is more than one year old.