Provisional tax

Provisional tax can be seen as a deposit a company or individual pays towards what their assessed would be once the annual tax return is done.


There are 3 provisional tax dates to be aware of:

  • 1st Provisional: 6months into the financial year.
  • 2nd Provisional: In the month of the financial
  • 3rd Provisional: 6months after the financial year.

All 3 provisionals get taken into account when penalties and interest for underpayment of provisional tax is calculated.

1st Provisional:

This is not always considered important in terms of accuracy, however, the higher the 1st provisional, naturally the lower you have to consider for your 2nd provisional tax return.

2nd Provisional:

This is considered the vital calculation seeing as all provisional tax has to be within 20% of total assessed tax, otherwise penalties will be incurred. This implies mainly when taxable income is higher than R1 million.

3rd Provisional:

This is not an actual return and just a payment done via e-filing.


  • After logging into , you will be on the home screen.
  • Select the taxpayer (if more than one company or individual on the profile)
  • On the left-side menu choose:
  • Payments: Create additional payment
  • “Tax type”: Provisional tax
  • Tax period : “year” & “03”
  • Example: 3rd provisional for 2020

Who must register and submit provisional tax returns?

– All companies (CC’s and Pty’s) are required, by law, to submit provisional tax returns. Directors and Members of companies. Individuals who earn any of the following:

  • High interest returns.
  • Rental income.
  • Income other and/or “over-and-above” their salaried income.

– Sole proprietors.
– Professionals not running as company (or a Personal Liability Company).
– Trading Trusts and Family Trusts.

What is required for the the Provisional tax return?

– Estimated turnover for the year.
– Estimated taxable income for the year.

How would we calculate the tax for the Provisional Tax Return?

We normally provide our clients (via our mandate which they have to sign) with 3 options:

1st option:

  • Always based on the prior year’s tax assessment and adding 8%.
  • For the 1st Provisional this amount is divided by 2.
  • For the 2nd Provisional, the 1st provisional is deducted to determine the amount to be payable for the 2nd provisional tax.

2nd option:

  • Client’s own estimate for what the taxable income and therefore, the tax would be.
  • Based on sales or projects.
  • Or just due to cashflow constraints.

3rd option:

This is based on the finalised accounting records for the period closest to the month, in which the Provisional tax submission becomes due.

Example: If the Financial year-end is February 2021. The 1st provisional would in August 2020. The profit until end of July 2020 will be used.

The profit is divided by the number of months that have passed for the financial year and then times by 12 – To get estimated annual profit. The same can be done for the turnover estimate, that needs to be filled in on the form, but this has no bearing on any penalties.

We then bring in specific transactions which may not have been taken into account OR which have not realised:

  • Interest on loan accounts.
  • Depreciation.
  • Potential sales and projects and the related costs.
  • 13th cheques or bonusses.

Tax is then calculate on the calculated profit – taking any current financial year provisional taxes, already paid, into consideration.

Use the applicable tax table:

  • For individuals, the sliding tax tables used for individuals.
  • If your company falls within the Small Business Corporation Rules, then use the applicable sliding tax table.
  • If the company is not Small Business Corporation the rate is 28%.
  • Trusts apply the 45% tax rate for taxable income, after distributions.

– Salim Khan

Remote Accounting support

We have introduced a new service to fill the gap for a lot of small- to medium businesses that process and handle their own accounts, but may:  


Not have the time to do in-depth reconciliations

  • Inter-company loans.
  • Director/Shareholder loans.
  • Balance sheet accounts.
  • Customer and Supplier account queries and variances.

Be unsure regarding VAT processes or how to adequately prepare and recon VAT

  • Easier ways to prepare VAT reports.
  • Confirm that VAT is accurate.

Want peace of mind that their records are correct and everything is in order

  • General account maintenance.
  • Lessen year end journals.
  • Assist in processing year-end journals.
  • Assist in processing complex journals (forex, sale of assets, etc).

Small Businesses who utilise Cloud Accounting software can utilise this service to ensure:

  • Accurate classification.
  • Bank recons are balancing.

Remote Accounting Services (RAS) is aimed at Small to Medium Enterprises who can perform the services directly on the client’s accounting software remotely (Ultra Viewer or Team Viewer or similar).

In essence it is a review service for Businesses, Entrepreneurs, Professionals and Sole Proprietors who maintain their own accounting records and prepare their own tax returns.

Should the client require the electronic device, the reports can be sent electronically, to us, in order for us to perform the work, while day-to-day tasks do not fall behind.


  • 1 Hour: R500.00/hr.
  • 2 Hours: R500.00/hr.
  • 3 Hour: R425.00/hr.
  • 4 Hours: R425.00/hr.
  • 5+ Hours: R350.00/hr.

Once-off fees are for clients who:

  • Are uncertain of their needs.
  • Only prefer the service during tax seasons and year-end finalisations.
  • Would like to get re-assurance that forms (VAT, Income tax, Provisional, EMP501’s) are prepared correctly.



  • 2.5 Hours over two months: R850.00 (R340.00/ph).
  • A contractual notice period of 30 days applies.
  • Hours not used cannot be carried over beyond the two-months period.
  • Additional hours required during the two-months period will be charged for at R400.00/hr.


  • 4 Hours over a period of one month: R1 150.00 (R287.50/hr).
  • A contractual notice period of 30 days applies.
  • Hours not used cannot be carried over beyond the one-month period.
  • Additional hours required during the two-months period will be charged for at R340.00/hr.


  • 9 Hours over a period of one month: R1 825.00 (R202.78/hr).
  • A contractual notice period of 30 days applies.
  • Hours not used cannot be carried over beyond the one-month period.
  • Additional hours required during the two-months period will be charged for at R250.00/hr.

Monthly fees are for clients who:

  • Have specific needs.
  • VAT needs to be monitored closely:
    – Internal reconciliations.
    – Submissions.
    – Follow-ups.
  • Sensitive Balance Sheet accounts need to be monitored.
  • Monthly management accounts are needed:
    – We will prepare these.
    – Monthly account movement inspection.
    – Monthly cashflow inspection.
  • Stay up to date on taxes that will become due.
  • Ensuring overall accurate classification of transactions.
  • Month-end journals.
  • Keeping asset registers up to date.

What is not included:

  • Monthly processing of accounts
  • Payroll preparation and submissions.
  • Preparation, compilation/Independent Review of Annual Financial Statements.
  • Actual submission and preparation of income tax returns.

– Salim Khan