Provisional Registration
Provisional tax isn't an independent tax; rather, it's a strategy to distribute the tax obligation across the assessment year. This approach helps taxpayers avoid hefty payments during the final assessment. Individuals are mandated to make a minimum of two advance payments based on projected taxable income within the assessment period. An additional payment is discretionary post the tax year's conclusion but prior to receiving the official assessment.
Any person who receives an income other than a salary is a provisional taxpayer. A provisional taxpayer is
- a natural person who derives income, other than remuneration or an allowance; company; or
- a person who is told by the Commissioner that he or she is a provisional taxpayer.
Excluded from being a provisional taxpayer as defined are any –
- Any natural person who does not earn any income from carrying on any business – provided that person’s taxable income will not be more than the tax threshold; or
- the taxable income of that person (earned from interest, foreign dividends and rental from letting of fixed property) will not be more than R30 000;
The first provisional tax payment – IRP6/1 – must be made within six months of the start of the year of assessment for 31 August or six months after the approved financial year-end date.
The second payment – IRP6/2 – must be made no later than the last working day of the year of assessment ending 28/29 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.
