Once again, it is that time of the year where individuals, trusts and companies are preparing to file and make payments for provisional tax before the 31 January 2022 deadline.
Any person who falls within the definition of a “provisional taxpayer” as defined in paragraph 1 of the Fourth Schedule of the Income Tax Act must file an IRP6 Form. If not, it could affect their tax compliance status.
Provisional taxpayers pay normal tax in advance for a particular year of assessment, based on their estimated taxable income for that year of assessment. It is applicable to companies, trusts and individuals who receive income not constituting remuneration (such as taxable interest, rental income or business income).
It is to assist taxpayers to meet their tax liabilities on an ongoing basis, as opposed to paying a large amount once.
Taxpayers are urged to file their returns and make payments via eFiling, rather than visiting Sars offices during the pandemic. eFiling allows you to request an IRP6 return and make secure online payments and submissions.
Taxpayers who are unable to access eFiling and who wish to visit a branch should first make an appointment. This can be done by calling 0800 00 7277, going to the Sars website www.sars.gov.za or sending an sms to 47277 with the word Booking (space) your ID number.
Provisional taxpayers who fail to submit the final provisional tax return within four months after the last day of the year of assessment will be deemed to have submitted an estimate amount of nil taxable income. Underestimation or underpayment may lead to penalties and interest.
In 2021, Sars introduced a Covid-19 Tax Relief for Provisional Tax, aimed at compliant small to medium-sized businesses and micro-businesses. Qualifying provisional taxpayers may pay 15% instead of one half of an amount equal to the total estimated liability (as determined in accordance with paragraph 17 of the Fourth Schedule) for normal tax, provided that the requirements of the tax relief are met. For more on this, go to www.sars.gov.za.
As we near the Provisional Tax Filing season deadline on 31 January 2022, Sars is ready and willing to assist you to become compliant. This is in line with our strategic objectives in which we have committed to “provide clarity and certainty’ and to “make it easy for taxpayers and traders to comply with their obligations”.
