Provisional tax is payable by all natural persons who trade in their own capacity, own a business or have more than one source of income subject to the allowable SARS exemptions.
- Natural persons exempt from making provisional tax payments:
- Natural persons under the age of 65 who do not carry on business and whose taxable income will not exceed the tax threshold or whose taxable interest, foreign dividends and rental income will not exceed R20 000.
- Natural persons over 65 years of age not carrying on a business (excluding rental from letting of fixed property) with a taxable income not exceeding R120 000.
The first provisional tax payment is due six months before the end of the tax year. The payment must be based on the basic amount or a lower estimate approved by SARS.
The second provisional payment is due on the last day of the tax year. The payment must be based on as estimate of the taxable income for the year. The following two tier model is in force:
- taxable income less than R1 million, the estimate must be equal to the lessor of the basic amount or 90% of the actual taxable income, or
- taxable income greater the R1 million, the estimate must be equal to at least 80% of the actual taxable income.
The third 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.