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Provisional Tax - First Provisional - How is the amount payable calculated?

Provisional Tax - First Provisional - How is the amount payable calculated?

Author: Natalie Wocke
Date: 2014-08-01
Taxpayers other than companies: Taxable Income less then R1,000,000: 

The first provisional tax payment for the 2015 year of assessment must be made on or before 31 August 2014, for taxpayers other than companies, having a February year end - just around the corner for many taxpayers.

The amount payable should be seriously calculated, by making an estimate of taxable income for the year. This estimate must include the taxable portion of Capital gains, but does not have to include lumpsum benefits on retirement, withdrawl, or a severance lumpsum- these are taxed according to separate tables.

One must then calculate the tax payable on this amount according to the tax tables, and deduct any rebates due to you. Divide the remaining amount by two, and deduct any employees tax paid for the year, as well as any foreign taxes paid that qualify for deduction, where taxable income includes foreign income. The difference is payable as your first provisional tax payment.

Do take note that the first provisional may generally not be less than an amount known as the "basic amount", and that the basic amount may need to be increased in certain circumstances.

It is always advisable to use a professional service to assist you in calculating your provisional taxes. Should you require assistance in this regard, contact Roberts and Chaplin, who have brances in Ballito (032-586 0387) and Umhlali (032-947 1010) for your convenience.