FAQ | HOW IS PROVISIONAL TAX CALCULATED?

The annual filing season for non-provisional taxpayers is drawing to a close at the start of December, but provisional taxpayers have until the end of January 2020 to file their returns for the 2019 tax year. In addition, provisional taxpayers are required to make their full income tax payment for the 2020 tax year less any employees’ (Pay-As-You-Earn) already paid at the end of February 2020. Provisional tax is all about timing.

So, what is provisional tax? The South African Revenue Service (SARS) explains that provisional tax is not a separate form of tax. It is a method of paying one’s income tax liability in advance. It requires the taxpayer to pay two amounts in advance of filing the tax return (each due in August and February), which are based on the person’s estimated taxable income.