Are You Prepared for the Upcoming Provisional Tax Deadline?

What is Provisional Tax?

Provisional tax allows both companies and certain individuals to pay their annual income tax in advance through two or three payments during the tax year.
The purpose is to prevent taxpayers from facing a large tax bill only at year-end, when the annual personal income tax return (ITR12) or corporate income tax return (ITR14) is filed in January.
While provisional tax helps spread the liability across the year, it also brings extra administrative responsibilities—such as filing the provisional tax return (IRP6) on time, two or three times a year. It also carries the risk of penalties, especially under-estimation penalties.
That’s where we step in to guide you.

Who Qualifies as a Provisional Taxpayer?

• Companies are automatically provisional taxpayers.
• Individuals who earn income other than a salary may also be provisional taxpayers, depending on SARS criteria.

Because SARS places the responsibility on you to determine your status, it’s best to confirm your provisional tax position with us.

The Three Provisional Tax Payments

1. First Payment – Due within six months of the start of the tax year.
• Example: If your 2026 tax year began on 1 March 2025, the first payment was due on 31 August 2025.
• This payment is based on half of the estimated annual tax, less employees’ tax already paid and applicable credits.
2. Second Payment – The upcoming deadline is 27 February 2026 (last working day of the tax year if it started on 1 March).
• This payment is stricter, with severe penalties for under-estimating taxable income.
3. Third (Optional) Payment – Can be made after year-end but before SARS issues the annual tax assessment.

Crunch Time: The Second Period Return

The second provisional return (due 27 February 2026) is retrospective, based on the total estimated tax for the full year, minus the first payment, employees’ tax already paid, and any credits or rebates.

Accuracy is critical—heavy penalties apply if your estimate is too low:

• Taxable income under R1 million: If your estimate is less than 90% of actual taxable income and less than the “basic amount” (previous year’s taxable income), a 20% penalty applies.
• Taxable income over R1 million: If your estimate is less than 80% of actual taxable income, a 20% penalty applies.

SARS may require justification for your estimate, and if dissatisfied, they can increase it—without the right to objection or appeal.

Their guidance is clear: estimates must be determined “sensibly and by careful reasoning and judgment, in a mathematical manner, and using experience, common sense and all available information.”

We’ll ensure your calculations meet this standard.

Other Penalties to Watch Out For

• Even if no tax is due, a ‘nil’ return must still be filed on time. Late submission attracts administrative penalties.
• Filing more than four months late may be treated as a ‘nil’ return, triggering under-estimation penalties unless taxable income was truly zero.
• Late payments incur an immediate 10% penalty, whether unpaid or simply delayed.
• Interest is charged on underpayments due to under-estimation and on late payments.

Why Partner With Us?

Provisional tax rules are complex, and SARS holds taxpayers accountable for compliance. That’s why it’s wise to let experts handle your provisional and annual tax returns.

We’ll:

• Accurately calculate your estimated taxable income.
• Ensure timely submission of IRP6 returns.
• Save you time, money, and stress by avoiding penalties and interest.

Deadline Alert: The second provisional tax payment is due on 27 February 2026.
Let us help you meet it with confidence.

Emily Gomes (ICB Senior Bookkeeper)

Senior Bookkeeper