Provisional Tax | South Africa Tax Guide 2006

Provisional taxpayers are required to make two payments during a tax year, i.e. every six months. In addition, provisional taxpayers with taxable income in excess of R50 000 per annum (Companies and Close Corporations: R20 000 per annum) should pay a third "top-up" payment to avoid interest leviable in terms of Section 89 quat of the Income Tax Act.

Under normal circumstances, this 3rd provisional payment is due 6 months after a taxpayer's year -end. In the case of a taxpayer with a February year-end, the "top-up" payment can be made by the end of September every year.

Taxpayers defined for provisional tax purposes

• Income earners not deriving remuneration as defined
• Directors of private Companies
• Members of Close Corporations
• Companies

Persons exempt from making provisional tax payment

• Income earners with net remuneration not exceeding R10 000 with effect from 1 March 2002
• Non-residents
• Certain farming, fishing and diamond-digging operators
• Natural persons over 65 years of age not carrying on a business with taxable income not exceeding R80 000
• Non-resident ship or aircraft charterers