WHAT IS PROVISIONAL TAX AND HOW DO I TAKE CARE OF IT?
- Any individual who receives an income other than their salary
- An employee who receives a salary from an employer who is not registered for employees’ tax
- Any company
- Any person classified as a provisional taxpayer by SARS
By allowing provisional taxpayers to pay in advance, the taxpayer does not find themselves with a large tax debt at the end of the tax year, or during assessment. With provisional tax, tax liabilities can be spread across the year, and taxpayers can pay in advance (at least two amounts).
All companies in South Africa automatically fall into the category of provisional taxpayers. Amounts due are calculated by taking the estimated taxable income into account for the specific year of assessment.
MMS Cloud Accounting can assist your company to handle your provisional tax payments to ensure total taxation compliance for your business. Our standard accounting packages include taxation services to address submission requirements as well as client services that remind you of upcoming taxation deadlines. To see our accounting packages, click here.
HOW & WHEN SHOULD PROVISIONAL TAX BE PAID?
- Half of the total estimated annual tax;
- Minus the employees’ tax for these 6 months;
- Minus any allowable foreign tax credits for these 6 months.
- The total estimated annual tax;
- Minus the employees’ taxes paid for the entire year;
- Minus any allowable foreign tax credits for the entire year;
- Minus the amount paid during the first provisional period.
- The total tax estimated payable for the year;
- Minus the employees’ tax paid;
- Minus any allowable foreign tax credits;
- Minus the amount paid for the 1st and 2nd provisional tax periods.