A natural person or an entity can be a provisional taxpayer; however, we will only consider natural persons in this article.

Any person who receives income other than a salary, is a provisional taxpayer.  Most salary earners are therefore non-provisional taxpayers if they have no other sources of income.

You will also not be a provisional taxpayer if the only other income you receive is the following exempt income:

  • If you receive interest of less than R23 800 if you are under 65; or
  • If you receive interest of less than R34 500 if you are 65 and older or;
  • You have income in a tax-free savings account.

A provisional taxpayer is defined in the Income Tax Act, as any –

  • natural person who derives income, other than remuneration or an allowance or advance as mentioned in section 8(1) or who derives remuneration from an employer who is not registered for employees’ tax (for example, an embassy is not obligated to register as an employer for employees’ tax purposes); or
  • 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 (for 2021 tax year: for taxpayers below age of 65 – R83 100; age 65 to below 75 – R128 650 and age 75 and over – R143 850); or the taxable income of that person (earned from interest, foreign dividends, rental from letting of fixed property and remuneration from unregistered employer) will not be more than R30 000;

There is no longer a registration or deregistration process to be a provisional taxpayer. The onus is on the taxpayer to determine if he or she is liable for provisional tax, and to request and submit the provisional tax returns via eFiling.

What is Provisional Tax?

Provisional tax is not a separate tax from income tax. It is a method of paying the income tax liability in advance, to ensure that the taxpayer does not remain with a large tax debt on assessment. Provisional tax allows the tax liability to be 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. A third payment is optional after the end of the tax year, but before the issuing of the assessment by SARS. On assessment the provisional payments will be off-set against the liability for normal tax for the applicable year of assessment.

What steps must you take to work out the amounts due?

The amount of provisional tax payable is worked out on the estimated taxable income for that particular year of assessment, as follows:

The First Period:

  • Half of the total estimated tax for the full year;
  • Less the employees tax for this period (6 months);
  • Less any allowable foreign tax credits for this period (6 months).

An IRP6 return is required to be submitted by 31 August with these details (the 1 st provisional return) together with any amount payable.

The Second Period:

  • The total estimated tax for the full year;
  • Less the employees tax paid for the full year;
  • Less any allowable foreign tax credits for the full year;
  • Less the amount paid for the first provisional period.
  • A further IRP6 return is required to be submitted by 28 February with these details (the 2 nd provisional return) together with any amount payable.

The Third Period (voluntary):

  • The total tax estimated payable for the full year;
  • Less the employees tax paid for the full year;
  • Less any allowable foreign tax credits for the full year;
  • Less the amount paid for the 1st and 2nd provisional tax periods.
  • A third IRP6 return is required to be submitted by 31 August following the tax year end with these details (the 3 rd or top- up provisional return) together with any amount payable should the taxpayer wish to do so.

How should it be paid?

The current process includes:

  • Register for SARS eFiling. The eFiling facility allows you to request for an IRP6 return and make your submission and payments online.
  • If you are already an eFiler, simply add provisional tax to your profile so that you can access and file your IRP6 return online.
  • Call the SARS Contact Centre on 0800 00 7277 to find out more about the provisional tax process
  • Visit the nearest SARS branch where our staff will help you to fill in and file your IRP6 electronically.