Get your provisional tax calculations right by using these four documents
1. Income statement (or an extract of your accounting records showing your profit and loss)
Look at exactly what money your company made during the tax
period. This is your total taxable income.
2. Invoices (for income and expenses)
This helps you check if you have any outstanding income or expenses you need to add into your taxable income.
*********** Hot off the press ************
You'll be paying a tax penalty to SARS on 27 February…
If you haven't submitted your provisional tax
return by 27 February 2015, then SARS will add a penalty to your tax
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!
3. A list of income items that you don't include in your taxable income (if applicable)
For example, if you get money from your insurance policy, this might be tax
4. A list of expense items you can't deduct (if applicable)
For example, if you did renovations to improve your business premises, you can't claim this expense as a deduction.
Once you've studied these four documents can you work out your provisional tax
correctly with the right information.
But what do you do with this information to work out your provisional tax
Here's how to use this information to work out your provisional tax
Calculate your estimated taxable income for the tax
year. This is the most important step so get it right by using the amounts from your income statement and invoices.
Calculate the amount of tax
you'll pay on this taxable income.
Subtract the annual tax
rebate from this. You can find this on SARS' tax
tables on its website. This gives you the total tax
you have to pay for the tax
year. This is where you'll subtract your tax
If you're calculating your first provisional tax
return, subtract half of the total tax
for the year. This will leave you with an amount due for the first period of the tax
Minus any employees' tax
you deducted for the tax
year. Only do this for the first six months if you're completing the first provisional return of the tax
Subtract any foreign tax
credits you have for the tax
year. Again, only do this for the first six months.
Add any outstanding SARS penalties and interest on this amount. This should be on your provisional tax
return, or you can get this information from SARS if it isn't.
If you're calculating your second provisional tax
return, subtract any provisional tax
you paid for the first provisional tax
By using these four documents to check all the information in your provisional tax
return, you can be sure it's correct.