August sees the first provisional tax deadline for 2019 of all registered provisional taxpayers with February year ends.
While SDK is in the process of working with you to determine your first provisional tax payment and to ensure compliance with SARS, here are a few factors to consider:
- Provisional tax is not a type of tax, it should rather be seen as a pre-payment of your income tax.
- The first provisional tax period is generally an estimate of what you anticipate your taxable income to be in the next tax year of assessment.
- It is highly recommended that the taxpayer should not submit an estimate which is less than the basic amount.
- Payments to SARS should be made by 28 August 2018 to limit the risk of payments be deemed late.
SARS PAYMENT METHODS
Please note that SARS no longer accepts payment per cheques. Alternative payment options are the following:
- Electronic Transfer (EFT)
- Making payment at your bank using the tax statement as proof
- E-Filing
How is the first provisional tax calculated?
Step 1: The total estimated taxable income for the year x the relevant tax rate = Tax payable for the whole year.
Step 2: Then the tax payable for the whole year is divided in half to obtain the portion of tax due for the first six months of the year.
Step 3: Any tax credits (such as employees tax, foreign tax credits and medical tax credits) are deducted from the tax amount calculated in step 2 to obtain the amount that needs to be paid to SARS by 31 August.
SARS verifications and first provisional tax declarations
SARS has started to request supporting documentation for the first provisional tax declarations that have been made, mostly where the declaration is less than then basic amount. The type of supporting documentation that you should have ready should it be requested from SARS is:
- Current year management accounts used to calculate the estimate income
- Tax Computation
- Reasons for amounts used in declaration
The above list is not extensive, and SARS may request any information they deem necessary to verify the declaration made.
CIPS NEWS
Lodgement of Annual Returns to CIPC
What is it?: This is a statutory return in terms of the Companies and Close Corporations Acts and therefore MUST be complied with.
Who: All Private, Public, External, Incorporated Companies and Close Corporations
When: Companies: have 30 business days from the date that the entity become due to file annual returns before it is in non-compliance with the Companies Act, and a penalty will be due. Close Corporations have from the first day of its anniversary month up until the thereafter to file Annual Returns before it is non-compliance with the Close Corporations Act.
How: Annual Returns can only be filed electronically on CIPC’s website (you first have to register as a costumer).
Cost: This cost will be calculated according to your annual turnover
What happens if I do not lodge my Annual Returns on an Annual basis: Failure to do so will result in the Commission assuming that the company and/or close corporation is not doing business or is not intending on doing business in the near future. Non-compliance with annual returns may lead to deregistration, which has the effect that the juristic personality is withdrawn and the company or close corporation ceases to exist.
Lodgement of AFS or FAS
Companies are required to file either one of the following with its annual returns submission:
- its audited financials;
- reviewed financials; or
- financial supplement (FAS) CoR30.2
When to submit AFS:
