02 Feb YOUR TAX DEADLINES FOR FEBRUARY (AND HOW TO AVOID PENALTIES)
The second provisional tax payment for the 2018 tax year is due by or on 28 February. Taxpayers are required to estimate their total taxable income (including any capital gains) for the tax year.
Percentage based penalties of twenty percent will apply where your estimate is not accurate enough –
- If your taxable income is less than R1 million, you will have penalties levied if your estimate of taxable income is less than the “basic amount” (essentially your latest assessed taxable income escalated by 8%) and also less than 90% of your actual taxable income for the year. Taxpayers who estimate their taxable income to be less than the “basic amount” must therefore be able to justify such lower estimate.
- If your taxable income is greater than R1 million, your estimated taxable income must be within 80% of the actual taxable income for the year to avoid penalties.
Whilst there are circumstances in which SARS may remit these penalties, this may involve a lengthy and possibly cumbersome dispute process. Best therefore to make accurate estimates from the outset.