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Accounting,  Tax

Provisional Tax

Provisional tax forms, called an IRP6, have to be submitted twice a year. The first one before 30 August, and the second one by 28 February. The purpose of these forms are to assist government with their cash flow throughout the year.

The calculation is based on the projected profit for the current financial year. So the form that has to be submitted before 30 August 2019, will be based on the projected profit for the financial year ending 28 February 2020. The tax paid with these forms will then be deducted from the tax calculated on the financial statements after year end.

It is important to do these calculations as accurately as possible. If there is a big variance, SARS will penalize the taxpayer for underestimation of provisional tax. This amount can range anything between R1000 and R5 000, based on your tax amount payable.

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