Provisional tax is not a separate tax from income tax. It is a method of paying the income tax liability in advance, to ensure that the taxpayer does not remain with a large tax debt on assessment. Provisional tax allows the tax liability to be spread over the relevant year of assessment.
Regular taxpayers make their tax contributions to SARS monthly via PAYE deducted off their paycheck automatically and submit one tax return every year for the end of February to describe their affairs – an ITR12.
Since provisional taxpayers earn money from other sources, they have to complete an IRP6 return AND make manual payments to SARS.
SARS wants provisional taxpayers to have an even cash flow and avoid paying one large (potentially crippling) chunk of tax in February, so they ask that two (or optionally three) payments are made during the tax year at the end of August and end of February, with an IRP6 required for each one.
The tax paid from the first and second payments is then credited against any tax owing at the end of tax season, and can be refunded by SARS if too much was paid.
Provisional taxpayers also need to submit an ITR12 tax return (just like regular taxpayers), except the due date for this is 31 January the following year (11 months after the tax season closed).
If you earn income other than a salary or an allowance, you must register as a provisional taxpayer. You must then pay tax in advance in at least two amounts during the year of assessment, based on estimated taxable income. You will have to do a final payment after being assessed.
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