Dear Client,
This is a friendly reminder that provisional tax returns and payments are due by the end of February for:
- Individuals (second provisional tax period)
- Companies with a February financial year-end
It is important that provisional tax estimates are reasonable and accurate, as SARS imposes penalties and interest where estimates are materially understated or where returns are not submitted.
Key legislative points to note:
- In terms of the Seventh Schedule to the Income Tax Act, provisional taxpayers are required to submit estimates that are not deliberately or negligently understated.
- Where an estimate is regarded as unreasonably low, SARS may impose interest on the shortfall in terms of section 187 of the Tax Administration Act.
- In addition, understatement penalties may apply under section 222 of the Tax Administration Act, depending on the nature and extent of the understatement.
- Non-submission of provisional tax returns may result in administrative penalties under section 210 of the Tax Administration Act, even where no payment is due.
To avoid penalties, interest, and unnecessary SARS queries, we strongly recommend that provisional tax estimates be reviewed and submitted before the deadline.
If you would like us to:
- Review or calculate your provisional tax estimate
- Submit your provisional tax return on your behalf
- Discuss your current tax position or cash-flow constraints
please contact us as soon as possible so that we can assist timeously.