You'll be paying a tax penalty of up to R4 000 to SARS on 27 February 205…
*********** Recommended Product ************
If you haven't submitted your provisional tax return by 27 February 2015, then SARS will add a R4 000 penalty to your tax bill…
Errors mean double penalties – one for the error, and one for not following the rules!
Don't know where to start?
Or how to calculate the tax?
to get your hands on a tell-all guide today! It'll walk you through every step in the provisional tax process, so you'll never put a foot wrong again!
Here's what the amended Tax Admin Act offers provisional taxpayers
According to SAnews.gov.za,
the Administration Laws Amendment Act
amends administrative provisions of, among others, the:
Income Tax Act;
Value Added Tax Act;
Customs and Excise Act;
Securities Transfer Tax Administration Act;
Tax Administration Act; and
Customs Duty Act.
The great news is the Tax Administration Laws Amendment Act
also reduces penalties for provisional taxpayers.
As you know, when it comes to provisional tax, you have to make two payments. You make one in August and the other by February the following year.
If you submit your second provisional tax return late and underestimate your tax liability, SARS imposes:
Late submission penalties. SARS will charge you a penalty ranging from R250 to R16 000 for each month your submission is late.
Late payment penalties. Paying your provisional tax after the due date attracts a 20% penalty on the late payment.
Penalties based on under-statement of liability. These can get up to 200%.
But this is about to change, thanks to the amendments in the Act.
Senior associate at Webber Wentzel, Joon Chong, says 'notably, the late submission penalty will be repealed with effect from tax years commencing on or after 1 March 2015.'
In addition, the penalty for underestimating your tax liabilty 'will be reduced by any late payment penalty imposed for the same provisional tax period, for tax years commencing on or after 1 March 2014.'
When the amendments take effect, it will result in lower penalties because SARS won't be able to impose the late submission penalty. In addition, the understatement penalty will be a net amount after subtracting the late payment penalty imposed for the same period.
Developments in the Administration Laws Amendment Act don't mean you shouldn't adhere to your tax obligations
While the amendments are good news, it doesn't mean you should intentionally underestimate your tax liabilty or submit your provisional tax return late.
Continue to pay your tax on time and be honest with your tax affairs.
Speaking of submitting returns, don't forget that the deadline for your second provisional tax payment is 27 February 2015.That's Friday! You'll face the existing penalties if you don't meet the deadline or underestimate your tax liabilty.
To be on the safe side, check out Provisional Tax 101.
It covers provisional tax from start to finish.