28 February marks SARS’ due date for the second Provisional Taxpayers’ 2023 tax return for the tax year 1 March 2022 to 28 February 2023. Taxpayers who fall in the Provisional Tax category are required to submit two compulsory tax returns (IRP6) for each tax year; the first which was due on 31 August 2022 is payable within the first six months of the tax year, and the second by no later than the tax year end, i.e., 28 February 2023.
Provisional tax payments are based on the taxpayer’s estimated taxable income and are advance payments calculated for that year. Similarly, any companies with either a February or August financial year-end must also submit their Provisional Tax returns before 28 February 2023.
Are you a Provisional Taxpayer?
The general rule of thumb is that provisional taxpayers (individuals and trusts) are those who earn income where no tax has been deducted. Salary earners who have no other source of income will contribute via PAYE deductions and are therefore categorised as non-provisional taxpayers. Provisional taxpayers are those who receive income (or to whom income accrues) other than remuneration.
However, if you earn a PAYE deducted salary and, in addition earn additional taxable income such as rental income, interest and investment income, freelance or business income, you may also qualify as a provisional taxpayer.
As a provisional taxpayer, you are required to submit your total estimated taxable income and pay the applicable tax thereon. Payment must reach SARS no later than 28 February 2023 via EFT or e-Filing.
Although there are many exclusions and thresholds to consider, taxpayers who are unsure of their obligations should consult a professional tax practitioner. Tax compliance is on top of the agenda at SARS and penalties for underestimation, late payment (with interest) or shortfalls will be levied immediately and at SARS’ discretion.
