Provisional Income Tax

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Our Tax service offerings vary from individuals to large companies, including alternatives such as provisional tax and capital gains tax (CGT).

Managing your taxes shouldn’t be a nightmare and a dreaded event of the year. Rather check out the different sections below about some specifically mentioned services or Contact us today to assist and manage it for you

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Provisional Income Tax

Any taxpayer who receives income other than a salary is a provisional taxpayer for example rental income, interest income and foreign dividends exceeding R 20 000.

The amount of provisional tax is worked out on the estimated taxable income for the year of assessment as follows:

1st Payment:

  • Half of total estimated tax for the full year
  • Less employees tax for this period (6 months)
  • Less allowable foreign tax credits for this period (6 months)
  • Due date: 6 months after the start of the year of assessment

2nd Payment:

  • Total estimated tax for the full year
  • Less employees tax for the full year
  • Less allowable foreign tax credits for the full year
  • Less the first provisional tax payment
  • Due date: the last day of the year of assessment

3rd Payment:

  • 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 first and second provisional tax payments
  • Due date: Voluntary payment within 7 months after the year of assessment if the financial year end is February or 6 months after the year of assessment in any other case

Directors of private companies and members of close corporations are regarded as employees. They are not considered to be provisional taxpayers unless they have income that falls within the scope of provisional tax income.

An IRP6 must be submitted for the 1st and 2nd period even if the tax due and payable is Rnil. If the taxable income is Rnil no return needs to be submitted.

Taxable Capital Gain are excluded when calculating the basic amount for provisional tax.

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Managing your taxes shouldn’t be a nightmare and a dreaded event of the year. Rather Contact us to assist and manage it for you.

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