SARS - provisional tax question

brucebru said:
I'm in the same boat. Have never paid provisional tax before and received the same comms as part of my SARS assessment last year (after receiving additional income through investments). After reading Purply's responses, I think I have also going to not submit them this year and see what happens. Once I register as a provisional payer, then I would expect them to be very stringent in terms of late payments etc... but since the system still doesn't have me registered as such, I would imagine they'd be happy as long as you are able to make the payments on time when submitting your ITR12... here's hoping :)
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But won't they potentially penalise you for being registered as the incorrect tax type, Sars can be anal like that?
 
BigAl-sa said:
This whole provisional tax thing is a load of bollocks if you are trying to save for/during retirement. You have people earning a salary of R500k+ pa with no savings and they don't have to bother with provisional tax. A pensioner earning R160k pa with interest bearing savings earning R31k pa has to go through the schlep of provisional tax.

Easy to say get an accountant, but those things are expensive...
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Surely with a simple submission like that you could use Taxman Tim to submit the provisional returns?
 
brucebru said:
I'm in the same boat. Have never paid provisional tax before and received the same comms as part of my SARS assessment last year (after receiving additional income through investments). After reading Purply's responses, I think I have also going to not submit them this year and see what happens. Once I register as a provisional payer, then I would expect them to be very stringent in terms of late payments etc... but since the system still doesn't have me registered as such, I would imagine they'd be happy as long as you are able to make the payments on time when submitting your ITR12... here's hoping :)
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You're taking a risk, because the thing is, being a provisional taxpayer is not a matter of choice, and it's not a question of being registered. Registration is just an admin step you need to take to file as required.

If SARS takes a look and decides you are an provisional taxpayer, then it doesn't matter whether you registered or not, you would be found to have underpaid your provisional returns (since you did not file it) and they will raise penalties and interest on those. Going back as far as they deem you became provisional.

The penalties can be waived (generally on the first offence i.e. the first return) but the interest cannot.

In practice I don't know exactly where they draw the line and start dropping the hammer but it's definitely not the case that simply not registering keeps you safe.
 
airborne said:
Surely with a simple submission like that you could use Taxman Tim to submit the provisional returns?
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Yup there is literally 2 -3 things that you need to fill in on a provisional return.

There is a reason these things exist. Most people dont put that tax aside and when its time to pay the money is gone.

I pop all the provisional tax in a high yield interest account and atleast make that tax money work for it till it needs to be paid.

Also you get the benefit of submitting your annual return end of Jan the following year.
 
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Snyper564 said:
Also you get the benefit of submitting your annual return end of Jan the following year.
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Yes although this works both ways because if you underestimated on provisional then you have accumulated more interest. Plus with the pain of dealing with figures from 23 months ago, just a month before the second provisional of the next tax year, I actually prefer not to use this allowance anymore.

Prov tax is a swings and roundabouts thing.
 
Tomtomtom said:
Yes although this works both ways because if you underestimated on provisional then you have accumulated more interest. Plus with the pain of dealing with figures from 23 months ago, just a month before the second provisional of the next tax year, I actually prefer not to use this allowance anymore.

Prov tax is a swings and roundabouts thing.
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I got my amounts pretty spot on so I give them the max Min amount not to trigger the understatement penalty then keep that for a few months too :P but that means you gotta know your stuff
 
Snyper564 said:
I got my amounts pretty spot on so I give them the max Min amount not to trigger the understatement penalty then keep that for a few months too :p but that means you gotta know your stuff
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Yep but generally people would much prefer to optimise a few ebucks earnings than minimise the interest they pay to SARS without even noticing it's there on the statement. Goes to show how much psychology there is in this, and it's not all rational.
 
Got a revised assessment for 2011 (yes, 14 years back)

There is R330 to pay and R 3250 in penalty. After waiting 55 mins on the phone, was told that the penalty is R250 per year after the return was submitted in August 2012

Shows how they are truly scraping the bottom of the barrell

And the date for payment is 20210101. I pointed this out to the clerk and she would not reply
 
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Fok ouens, ek weet nie.

Apparently, I have to pay more than R300k in this year.

With my father passing away and my earnings fscking shooting through the roof it's a fsckup.
I will definitely have to sharpen up my tax knowledge or pay the right people to do this for me. I don't know.

I will swallow this one but it hurts.
 
1am7h30n3 said:
I re-read my ITA34 notice of assessment and I was charged extra for "interest on underpayment of provisional tax" so I'm pretty sure that means no additional penalties. I still haven't spoken to SARS about it.
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I underpaid my provisional tax last year but after assessment I didn't grt charged for interest?
 
brucebru said:
I'm in the same boat. Have never paid provisional tax before and received the same comms as part of my SARS assessment last year (after receiving additional income through investments). After reading Purply's responses, I think I have also going to not submit them this year and see what happens. Once I register as a provisional payer, then I would expect them to be very stringent in terms of late payments etc... but since the system still doesn't have me registered as such, I would imagine they'd be happy as long as you are able to make the payments on time when submitting your ITR12... here's hoping :)
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20% penalty for the underpayment of provisional tax and interest for late payment if assessed other 31/8/2025. This is imposed automatically by the system, no human intervention.
 
Vrotappel said:
20% penalty for the underpayment of provisional tax and interest for late payment if assessed other 31/8/2025. This is imposed automatically by the system, no human intervention.
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Is it a 20% on the total amount for the year or just 20% of the amount that was underpaid?
 
Well I registered as a provisional taxpayer and submitted and paid now before 28 Feb. I'm confident that I got it completely wrong. I guess it will sort itself out once I get to the ITR12 submission.
 
Tomtomtom said:
You personally or you plus your trusts and companies?

If that's all in total I'd wager you are getting off very lightly!
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I would echo that too.

Its all relative you only pay tax on your profits/gains.

If you paid around R300k the profit was just over R1m (assuming income tax - could be around R2m if CGT at 18% margin)... which is normal nothing out of the ordinary here.

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