Page 15 - P6 Slide Taxation - Lecture Day 6 - Provisional Tax Companies Only

Additional tax, interest and penalties

Second provisional tax payment:

 Late payment

• 10% penalty of amount not paid (4 Schedule, par 27)
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• Interest @ prescribed rate of amount not paid for period unpaid (s 89bis(2))

• Inadequate year-end estimate

• 20% underestimation penalty

▫ Taxable income > R1 million:

 If estimated taxable income < 80% of actual taxable income and the basic amount

 20% penalty on difference between tax that he should have paid and tax actually paid
(4 Schedule par 20(1)(a))
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▫ Taxable income ≤ R1 million:

 If estimated taxable income < 90% of actual taxable income

 20% penalty on difference between tax that he should have paid and tax actually paid
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(4 Schedule par 20(1)(b))

 Year-end estimate late

• 20% penalty on difference between tax that he should have paid and tax actually paid
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to date (4 Schedule par 20A)