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Provisional tax once off situation?

Posted 26 November 2015 under Tax Questions



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Minnie says:
25 November 2015 at 15:08

In the 2015 tax season my employer paid me my full salary and did not subtract PAYE. This was the case for 3 months. I did not get an IRP5 for that period. I know that I need to pay that tax portion How do I declare that to SARS? And avoid becoming a provisional tax payer

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TaxTimTaxTim says:
25 November 2015 at 16:11

In your tax return, you need to indicate yes to the question relating to "other taxable receipts and accruals" and then include it in this section of the tax return.

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Minnie says:
25 November 2015 at 17:31

Thank you, that makes sense. Would this make me a provisional tax payer?


TaxTimTaxTim says:
25 November 2015 at 20:04

If it's a once off situation, then you can just declare the earnings on your tax return the way I described.
Why did your employer not deduct the PAYE?


Minnie says:
26 November 2015 at 7:29

That was a once off situation. The company was in the process of registering for PAYE, that's why they have not deducted PAYE yet. Since then, they are registered and for the rest of my employment there, they did subtract PAYE and gave me IRP5 for that period. Now, I submitted my tax form to SARS yesterday, with the section for "other income" filled it. They, however, slapped me with a penalty for underestimation of provisional tax and interest. I'm also now set as provisional tax payer by SARS. What should I do next? How can I let SARS know my situation and that I should not be a provisional tax payer.


TaxTimTaxTim says:
26 November 2015 at 8:46

You need to click "dispute" on the ITA34 which will then open up a NOO1 Notice of Objection page for you to file an objection. You will need to explain the reason for the PAYE not being deducted with the date you joined the company and the date from which the company was registered for PAYE. Perhaps you could also submit your employment contract showing the date you joined the company.

Disputes can take a long time to resolve, so unfortunately you will need to pay the penalty, however it should get reversed. SARS has a pay now, then dispute later policy.

You should not be set up as a provisional taxpayer and SARS should reverse this once they resolve your dispute. You can always follow up and call them on 0800 007 277 to clarify.


Minnie says:
26 November 2015 at 8:48

Thank you very much! This was so helpful! Keep up the good work :)


TaxTimTaxTim says:
26 November 2015 at 10:38

Only a pleasure - thanks for the great feedback!


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