SARS Provisional Tax
It’s the middle of the tax year and time to pay SARS his due. The provisional tax deadline is the 31 August 2016.
SARS is concerned that if you wait until the end of the year and pay all your tax in one go, you won’t have enough money available to pay everything. (It’s quite possible it will have been spent on new clothes, school fees or that iPad you’ve been eyeing). So they insist that we pay SARS at least twice a year, in the middle and at the end. These interim returns and related payments are called provisional tax returns. A final income tax return is also submitted, but only after the end of the tax year, once everything is wrapped up. You can then top up any tax you short-paid in the provisional tax returns.
Who should submit a provisional tax return? If you are a director of a company or a close corporation you need to submit provisional tax returns twice a year, or if you have any income other than salary and interest or dividends from investments. Other sources of income might include rental, freelance income, consulting fees, any kind of business, even if it’s just on the side.
If you are a company director and you only earn a salary where PAYE is deducted each month, then there may be no additional tax payment required this month. In that case the provisional tax return is merely a formality – but still necessary. Otherwise, you will need to pay tax on the profit you make from your other sources of income. This means that you can offset your expenses relating to the income before calculating the tax.
If you need help submitting your return or calculating the tax before the deadline, contact EM Solutions for support.
Leave A Comment