If employees' tax has been deducted from your remuneration and paid to the South African Revenue Service (SARS) by your employer on your behalf, and if you are a provisional taxpayer, the employees' tax you have paid may be set off against provisional tax payments you must make.
So, who is a provisional taxpayer, and what does being a provisional taxpayer mean?
You are a provisional taxpayer if:
* You earn taxable income, other than remuneration, of more than R1 000 a year.
Since interest income up to R2 000 is exempt from tax, if your only non-remuneration type income is interest, you will only have to register as a provisional taxpayer if your interest income exceeds R3 000;
* You are a director of a South African private company or a member of a CC; or
* You are notified by the Commissioner for Inland Revenue that you are a provisional taxpayer.
Companies and CCs are provisional taxpayers.
There are certain situations where you will not need to register as a provisional taxpayer:
* If you are over 65 years old on the last day of the tax year and your income is less than R50 000 for the year, and does not arise because you are carrying on a business.
This exception will only apply if your income is in the form of remuneration, interest, dividends or rental from letting property;
* If you are non-resident and derive income in the form of royalties or from owning or chartering ships or aircraft.
Special provisions also apply to certain fishing, farming and diamond-digging operations.
Unless SARS has already informed you that you are a provisional taxpayer you must advise the taxman that you now qualify as one.
You must make payments, with an IRP 6 form, to SARS twice or three times a year.
For example, for the tax year ending 28 February 2000, you will need to make a payment on August 31 1999 and another payment on February 28 2000.
If you do not submit your payment by these dates you will be liable for a 10 percent penalty and interest on the late payment.
If the total tax payable for the year has not been paid by the second date, you may make a top-up payment on September 30 2000.
Provided all the tax has been paid by that date and enough tax has been paid on the first two payments you will not be charged interest on the balance of the tax payable.
If you are an individual and your taxable income is less than R50 000 you need not make this last payment.
Instead, you can wait to be assessed to pay the balance of the tax owing.
In the case of a company or CC the taxable income must be less than R20 000 for this to apply.
The payments must be submitted with an IRP6 form.