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What is Provisional Tax?\u00a0<\/p>\r\n\r\n\r\n\r\n
Provisional Tax is not a separate form of Income Tax.\u00a0 It is the method of paying\u00a0your\u00a0income tax liability in advance to ensure that\u00a0you\u00a0don\u2019t\u00a0have a large tax liability on assessment.\u00a0<\/p>\r\n\r\n\r\n\r\n
A third payment is optional after the end of the tax year but before the issuing of the assessment by SARS \u2013 Sars.gov.za\u00a0<\/p>\r\n\r\n\r\n\r\n
Provisional Tax is\u00a0generally\u00a0paid by individuals who earn non-salary income, for example, from a trade, or small business that you run, rental income, or money from investments.\u00a0<\/p>\r\n\r\n\r\n\r\n
In this regard, it can be a very useful tax tool, in that you don\u2019t pay your tax on a monthly basis (like other salary earners), so you keep the money in your bank account and earn interest, but you make provisional tax payments every 6 months, and this avoids\u00a0a situation where you have to make a big bullet income tax payment on assessment.\u00a0<\/p>\r\n\r\n\r\n\r\n
Regular tax-payers make their SARS monthly payment in the form of PAYE (Pay As You Earn) which is automatically deducted from their monthly salary and submitted on their Tax Return once a year at the end of February.\u00a0<\/p>\r\n\r\n\r\n\r\n
Who is Exempt?\u00a0<\/p>\r\n\r\n\r\n\r\n
Provisional Tax needs to be paid by the end of August and the end of February, with an optional payment at the end of September.\u00a0<\/p>\r\n\r\n\r\n\r\n
Some tips to consider.\u00a0<\/p>\r\n\r\n\r\n\r\n
Contact us on\u00a0admin@118accounting.co.za<\/a>, for any of your tax needs.\u00a0<\/p>\r\n\r\n\r\n\r\n Sources \u2013 SARS.gov.za and TAXTIM.co.za<\/p>\r\n