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Tax Talk

Tax Talk

Date: 2014-07-25
Provisional Taxpayers - Who is specifically exempt from paying provisional tax?

Last week we explored the definition of "provisional taxpayer". We also looked at general exclusions. We continue this week by looking at who is specifically exempt from the payment of provisional tax.

Para. 18(1) of the Fourth Schedule states that the following shall be exempt from paying provisional tax-

- any person whose liability for normal tax for the relevant year of assessment, payments are required to be made under section 33 of the Act, which deals with Non- RSA resident owners or charterers of ships or aircraft - very specific, so we will not explore this any further.

Natural persons less than 65 years old:

- any natural person who on the last day of that year is less than 65, where that person does not derive any income from carrying on a business, but only if their taxable income for the relevant year of assessment is not in excess of the tax threshold (R70, 700 for 2015) or, if their taxable income is derived from interest, foreign dividends and rental income, as long as this is not greater than R20,000.

Natural Persons 65 years and older:

A natural person 65 or older on the last day of the year of assessment, will be exempt from paying provisional tax, if SARS can be satisfied that the person's taxable income for the year of assessment will not be greater than R120, 000, will not be derived from carrying on any business, and will only be derived from remuneration, interest, foreign dividends and fixed property rentals.

The onus is on the taxpayer to determine whether they are liable to submit a provisional tax return. Next week we will explore how the amount payable is calculated. Remember - it is always advisable to obtain advice specific to your unique circumstance. Roberts and Chaplin have offices in Ballito (032) 586 038 and Umhlali (032) 947 1010, should you require specific advice.