The long and short of it.

Provisional tax return is a measure to assist individuals and small to medium sized businesses by providing cash flow relief. It is not separate from regular income tax, but rather an option to pay tax in advance to avoid tax debt.

Who is a provisional taxpayer?

Individuals who earn a non-salary can register for provisional tax. This income can come from an allowance, foreign dividends, letting a fixed property, interest from investments or from running a small business. Individuals who earn a traditional salary in addition to extra income streams can also register at SARS.

How does it work?

During the tax year, provisional taxpayers are required to make at least two advance payments. A voluntary third payment can be made within 6 months of the end of the tax year.

The payments will be off-set against the liability for regular tax for the tax year under assessment

• The first tax payment is due during the first half of the tax year, before the last business day of August.
• The second payment needs to be made on or before the last business day of February.

One morning, when Gregor Samsa woke from troubled dreams, he found himself transformed in his bed into a horrible vermin. He lay on his armour-like back, and if he lifted his head a little he could see his bThe amounts are based on your taxable income estimate. SARS has a nifty example on how to calculate amounts due for provisional tax.

How to pay provisional tax:

1. Register for SARS efiling －if you’re already registered, you can simply add provisional tax to your profile － and file your IRP6 return online.
2. Visit your nearest SARS branch.
3. Request a call from Hugo & Venter so we can do an assessment for you.

Provisional tax exemptions:

Exemptions from paying provisional tax apply if:

• Your generated income is not registered for PAYE and the total annual income is not more than R30 000.
• The amount of taxable income doesn’t exceed the annual tax threshold (amounts below is for the 2021 tax year).
  • Your taxable income is less than R87 300 and you are under the age of 65.
  • Your taxable income is less than R135 150 and you are between the ages of 65 and 74.
  • Your taxable income is less than R151 100 and you’re 75 years or older.
• You received an exempt amount from a tax-free savings account.
• You run an approved public benefit organization or recreational club.
• Your business is a body corporate or share block company.

It’s the start of a new year － the best time to get your finances in order! Call Hugo & Venter today.