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
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)
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, jurstic 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.
The third provisional tax payment must bring the total tax paid for the year to 100% of the taxpayer's liability to avoid interest and penalties.