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August 2019 NEWSLETTER
Do You Qualify As A Provisional Taxpayer
What is provisional tax?

Provisional tax is not a separate tax, but a method to regulate the amount of income tax paid to the South African Revenue Services (SARS). In order to avoid making one large tax payment to SARS, provisional tax payments are made during a tax year.

With each provisional tax declaration, the taxpayer needs to estimate their taxable income for the full tax year based on information available at the time of the estimate.

It is of utmost importance to ensure that the estimate is done as accurate as possible, as SARS may impose underestimation penalties if the estimate was not at least 80% accurate (if actual taxable income is over R1 million) or 90% accurate (if actual taxable income is under R1 million).


Requirements for registration?

Any person, who receives taxable income other than a salary, is a provisional taxpayer. A provisional taxpayer is defined in paragraph 1 of the Fourth Schedule of the Income Tax Act No 58 of 1962, as –
  • Any natural person who derives income, other than remuneration or an allowance or advance;
  • Any company; or
  • Any person who is notified by the Commissioner that he or she is a provisional taxpayer.
Excluded from being a provisional taxpayer, as defined, are any – 
  • Approved public benefit organisations or recreational clubs;
  • Body corporates, share block companies or certain associations of persons; and
  • Persons who are exempt from paying provisional tax, namely:
    • Non-resident owners or charterers of ships or aircraft;
    • Any natural person who does not earn any income from carrying on any business 
      • provided that person’s taxable income will not be more than the tax threshold (for 2020 tax year: for taxpayers below age of 65 – R79 000; age 65 to below 75 – R122 300 and age 75 and over – R136 750); or 
      • the taxable income of that person (earned from interest, foreign dividends and rental from letting of fixed property) will not be more than R30 000.

When is provisional tax payable?

There are two compulsory provisional tax declarations and payments per tax year, with a voluntary third provisional payment to account for any underpayment of provisional tax. 

The deadlines for submission of provisional tax declarations (IRP6) and payments depend on the type of taxpayer and their year-end. The deadlines for the 2020 tax year (relating to the period 1 March 2019 to 29 February 2020) are as follows –  

For individuals, Trusts and Companies with a February year end:

  2020 first provisional tax (compulsory)
31 August 2019
 
  2020 second provisional tax (compulsory)
29 February 2020
 
  2020 third provisional tax (voluntary)
30 September 2020
 

For Companies with a different year end than February:

  2020 first provisional tax (compulsory)
6 months after year end
 
  2020 second provisional tax (compulsory)
12 months after year end
 
  2020 third provisional tax (voluntary)
6 months after second provisional tax
 

If you require any additional information relating to provisional tax, please do not hesitate to contact our offices.































We Have Moved To Our New Office Building Next Door.
OFFICE NEWS:

We Have Moved To Our New Office Building Next Door.

Our contact details will remain the same except for our physical address which will now be 22A Church Street, Durbanville, 7550.


   














Don’t Let a Death or Disablement Destroy Your Business
ArticleImage Your business could be in serious trouble if a shareholder suddenly dies, or if a key player in the business is disabled or dies. How can you manage these risks? 

A good start is to take out the correct insurance cover upfront. Appropriate policies can both reduce the risks to the business and provide financial assistance to an affected shareholder’s families. 

We’ll discuss what “buy/sell insurance” is and what its benefits are, then we’ll have a look at “key person insurance”, with a final note on the need to take expert advice regarding the potential tax, death duty and legal exposure.
   
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If Artificial Intelligence Is Not That Intelligent, Should We Be Worried About Our Jobs?
ArticleImage “The Rise of the Robots”, “How Artificial Intelligence will put you out of a job”, “AI and the industries it will disrupt” – headlines like these are multiplying, and the “Fourth Industrial Revolution” is well and truly upon us.

Whilst there will always be a host of uncertainties around where AI is ultimately going to lead us, we should all make sure now that we understand what it is all about - and how it is likely to impact on us both professionally and personally in the near future.

Let’s start off by asking two questions: “Will AI get ‘intelligent’?” and “So, what happens to our jobs?”. 

We’ll address them by analysing the lessons of the First, Second and Third Industrial Revolutions…
   
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The Big Mac Index Says the Rand is Way Undervalued
ArticleImage Over 80 countries worldwide produce McDonald’s Big Mac hamburgers to similar recipes, and that, say some researchers, makes them a perfect universal commodity with which to compare the PPP (Purchasing Power Parity) of different currencies.

Hence The Economist’s annual “Big Mac Index”. And whilst many economists question the real value of “Burgernomics”, and whilst it indeed began as nothing more than a lighthearted attempt at establishing currency values, it has over the decades gained a degree of traction and credibility.

So let’s have a look at what the Index is saying about our Rand. By how much is it really undervalued? And what does that say about our economy?
   
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SARS: Changes to the Employer Statement of Account
ArticleImage This form is designed so that employers can easily reconcile their payroll taxes (PAYE, UIF and SDL). These taxes have proved difficult to reconcile and this redesigned form is intended to simplify this process. It is important to get this right to avoid paying penalties and interest.

A significant step taken by SARS is that employers can now actively manage their payroll taxes. Businesses can now make adjustments to their account and can correct misallocated payments.  Omissions and other account mistakes can be corrected (there are misallocations going back a few years) and SARS accept they will have to assist in resolving some of the queries. A case management system …
   
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Your Tax Deadlines for August 2019
ArticleImage Individual provisional taxpayers need to submit their first provisional form and payment by or on 30 August. 

Companies with year ends in either February or August need to file their first or second provisional returns and payments also by or on 30 August.

Other deadlines this month are …
   
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Disclaimer

The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.


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