Provisional Tax

Income Tax / Provisional Tax / Provisional Tax: Company / Provisional Tax: Individual / February 3, 2018


What is it?


Provisional tax is not a separate tax. It is a method of paying tax due, to ensure the taxpayer does not pay large amounts on assessment, as the tax load is spread over the relevant year of assessment. It requires the taxpayers to pay at least two amounts in advance, during the year of assessment, which are based on estimated taxable income. Final liability, however, is worked out upon assessment and the payments will be off-set against the liability for normal tax for the applicable year of assessment. The aim is to help taxpayers meet their liabilities in the form of two payments, instead of in the form of a single, large sum on assessment. A third payment is optional after the end of the tax year, but before the issuing of the assessment.


Who is it for?


Any person who receives income (or to whom income accrues) other than a salary, is a provisional taxpayer. A provisional taxpayer is defined in paragraph 1 of the Fourth Schedule of the Income Tax Act, No.58 of 1962, as any –

  • Person (other than a company) who derives income, other than remuneration or an allowance or advance as mentioned in section 8(1);
  • company; or
  • person who is told by the Commissioner that he or she is a provisional taxpayer.


When should it be paid?


  • The first provisional tax payment must be made within six months of the start of the year of assessment for 28 February or six months after the approved financial year end date .
  • The second payment must be made no later than the last working day of the year of assessment ending 28 February.
  • The third payment is voluntary and may be made –
    • Within seven months of the year of assessment, where the year of assessment ends in February, which is 30 September and
    • Within six months of the year of assessment, in any other case.


Top Tip: Remember that, by making your submission on time, you can ensure a hassle-free, smooth submission. Late submission could lead to you being charged with penalties and interest.

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Nivesh Mahadeo, Managing Director of ATB Consultants (Pty) Ltd, Accounting - Taxation - Business

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