HomeHome SearchSearch MenuMenu Our productsOur products

Use this lifeline to avoid provisional tax penalties

by , 28 November 2013
If you haven't paid your provisional tax yet, you'll be glad to know there could be a way out. Use this lifeline to avoid provisional tax penalties...

Failure to pay provisional tax could result in these penalties:

  • Late submission penalties (also known as administrative non-compliance penalties);
  • Late payment penalties (also known as administrative non-compliance penalties); and
  • Penalties based on under-statement of liability.

Is there a way to avoid provisional tax penalties?

Yes. There could be a way out.

Here's how to avoid provisional tax penalties

The bad news is you can't escape the penalties altogether. But you can shrink the interest charges by using this lifeline SARS has given you – the voluntary third payment, says the Practical Tax Loose Leaf Service.

When it comes to provisional tax, you must pay half of the estimated tax liability with the first return. You pay the rest on the second return and if you need to 'top-up' your payment, you'll make a third payment. This is your lifeline.

Because the third provisional tax payment is voluntary, SARS doesn't issue returns for the third payment (IRP6 (3) anymore. This means that if you want to make a third payment, simply make the payment to SARS and they'll add this to your provisional tax account.

How to qualify for SARS' voluntary third payment lifeline

Not everybody can take advantage of the third provisional payment. Individuals and trusts must have an income of R50 000 or more to use this third payment. Companies and CCs must have an income of R20 000 or more.

If you qualify to take advantage of the third payment, make sure you're familiar with the payment deadlines. And if you don't qualify, make sure you pay on time to avoid penalties.

 



Related articles




Related articles



Related Products



Comments
0 comments


Recommended for You 

  Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance



Here are all the most interesting, thought-provoking and common tax questions
asked by our subscribers over the last tax year – everything from A to Z!

To download Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance click here now >>>
  Employees always sick? How to stop it today



Make sure you develop a leave policy to regulate sick leave in your company.

BONUS! You'll find an example of the leave policy and procedure in this report.

To download Employees always sick? How to stop it today click here now >>>
  Absenteeism: Little known ways to reduce absenteeism



This FREE e-report will tell you how you can reduce absenteeism in your workplace while avoiding the CCMA and without infringing your employees' labour rights.

To download Absenteeism: Little known ways to reduce absenteeism click here now >>>
  7 Health & safety strategies to save you thousands



Don't let a health and safety incident cost you one more cent. Implement these seven
strategies in your company today.

To download 7 Health & safety strategies to save you thousands click here now >>>