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Individuals and companies need different documents for calculating provisional tax. Do you know them?

by , 08 December 2015
Provisional tax is a tax system that makes taxpayers estimate and pay their taxes in the form of two payments. This will be one payment every six months, instead of having to pay one big amount at the end of the tax year. (Note that the second payment has its deadline at the end of the working day on the 28th of February).

Now, it's worth noting that, in order to pay provisional tax as a natural person, you must first qualify as a provisional taxpayer.

This will depend on whether or not the natural person:


· Earns taxable income other than remuneration if your taxable income goes beyond the tax threshold;
· Carry on a trade;
· Earn more than R30 000 from renting a fixed property.

But ALL companies and close corporations are provisional taxpayers.

Having said that, the documents required, when calculating provisional tax, will differ between individuals and companies - as shall be laid out below, so read on...

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Documents required for individuals:

1. Payslips;

2. Invoices;

3. Proof of your business expenses;

4. Bank account statements (for the last three months at least;

5. Investment statements;

6. Details regarding your medical aid expenses;

7. A list of retirement annuity contributions;

8. A list of donations to section 18(A) charities;

9. A logbook which documents private as well as business travel. Also, any expenses relating to maintenance, fuel, insurance and licensing; and

10. A list detailing all of your capital gains. This is because your capital gain could actually push you over the R1 million mark and into 'tier 2'. Click here to learn more…
 
Documents required for companies:
The documents required for a company are a lot simpler, as can be seen below…
 
1. An income statement, or an extract from your accounting records which indicate profits or losses;
2. Invoices for both income as well as expenses;
3. If applicable, a list of income items which are not taxable, as well as a list of expense items which are not deductible.
 
*Those were the different documents which are required to calculate provisional tax for individuals and companies.

So ensure that you have them all in order so as to ensure that you calculate provisional tax correctly.

To learn more, subscribe to the Practical Tax Loose Leaf Service today. 

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