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Provisional tax for business and personal

Posted 25 August 2015 under Tax Questions



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Gman says:
14 August 2015 at 6:54

Last month I registered my company as a Pty Ltd (previously I was a sole proprietor and was being taxed in my personal capacity). I am paying myself a monthly salary from my company, plus charging the company for a portion of the cell phone bill, etc. With respect to provisional tax, are my following understandings correct:
(a) In general, do I need to pay provisional tax both in my private capacity and as a business?
(b) Do I need to pay provisional tax now [August] for my business? (if not, when will I first need to complete my provisional tax return for my business?)
(c) For the first part of this tax year (before my business was registered), do I still indicate all income and expenses under my personal name?

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TaxTimTaxTim says:
14 August 2015 at 7:49

Your company would need to declare and pay provisional tax, that is correct. However you will not have to if you are receiving a salary each month from the company. You will have to complete and submit a Provisional Tax Return for your company 6 months and 12 months after the financial year end, so this would be August if your year end is February. Yes you would indicate the amounts under Business Income on the TaxTim tax return process for all amounts which were earned before the company was registered.


Gman says:
15 August 2015 at 12:28

Thank you - some of my queries have been resolved (e.g. questions (c)).

However, regarding (a), as I said in my original Q, in my personal capacity I am not only receiving a salary, but also some other income. Does that not mean I will need to pay provisional tax in my personal capacity too?

Regarding question (b), I understand that I usually will need to complete and submit a prov tax return each August and February. However, my company was only registered with CIPC last month, so the crux of my Q was when I need to complete and submit my FIRST business prov tax return?


TaxTimTaxTim says:
17 August 2015 at 18:31

When is the year end of the company according to CIPC?

How much is the value of your other income, if it is more than R30 000 then yes you will need to register as a provisional taxpayer. Please read our blog about What is Provisional Tax? How and when?


Gman says:
25 August 2015 at 10:24

Thanks for your reply. As regards my company year end, it is February. So, when do I need to complete and submit my FIRST business prov tax return? [I registered as a private company only last month]


TaxTimTaxTim says:
25 August 2015 at 16:25

You would need to submit your first provisional return by this Friday 28th of August and make payment on the same day.


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