January 2024 tax deadline warning for South Africans
Tax season for provisional taxpayers will be closing on 24 January 2024.
Provisional taxpayers will have until this date to pay their dues and finalise their affairs for the 2022/23 tax year.
Non-provisional taxpayers should have already submitted their annual income tax between 7 July 2023 and 23 October 2023.
These taxpayers would have declared their annual employment income after having earned it in the previous tax year, that is, between 1 March 2022 and 28 February 2023.
A provisional taxpayer, meanwhile, is any person who receives income other than remuneration. Most salary earners are, therefore, non-provisional taxpayers if they have no other sources of income.
According to the definition in the Income Tax Act, a provisional taxpayer is defined as any:
- Natural person who derives income, other than remuneration or an allowance or advance or who derives remuneration from an employer who is not registered for employees’ tax (for example, an embassy is not obligated to register as an employer for employees’ tax purposes)
- Company; or
- Person who is told by the commissioner that he or she is a provisional taxpayer.
Excluded from being a provisional taxpayer as defined are any –
- Approved public benefit organisations or recreational clubs that have been approved by the Commissioner in terms of s30 or s30A;
- Body corporates, share block companies or certain associations of persons that are exempt from tax;
- Non-resident owner or charterer of ships or aircraft;
- Natural person who does not earn any income from carrying on any business – provided that person’s taxable income will not be more than the tax threshold;
- A small business funding entity;
- A deceased estate.
- Any association that has been approved by the commissioner
Unlike employment-only taxpayers, provisional taxpayers are given more time to reconcile and declare their total personal income from both employment and non-employment sources.
Provisional taxpayers have from 7 July 2023 until 24 January 2024 to submit their annual tax returns and pay tax on all income earned between 1 March 2022 and 28 February 2023.
Avoid confusion
As has previously been highlighted by tax experts, the 24 January deadline for the 2022/23 tax year is not the same as the provisional tax return dates for the 2023/24 tax year.
According to SARS, provisional tax is not a separate tax from income tax. It is a method of paying the income tax liability in advance, to ensure that the taxpayer does not have a large tax debt on assessment.
“Provisional tax allows the tax liability to be spread over the relevant year of assessment. It requires the taxpayers to pay at least two amounts in advance, during the year of assessment, which are based on estimated taxable income.”
Provisional taxpayers typically have to submit two provisional tax returns during the tax year and then a final tax return of actual figures after tax year-end.
A third payment is optional after the end of the tax year, but before the issuing of the assessment by SARS.
For the 2023/24 tax year, provisional taxpayers would have already submitted their first provisional tax payment by 31 August 2023, where half the total estimated tax for the full year was to be paid.
The second tax payment is due by 29 February 2024, where the balance of the total estimated tax for the full year is to be paid.
The payments on these first and second submissions are consolidated into the provisional taxpayer’s eventual declaration of their total personal income within the annual submission.
The 24 January tax year end is in respect of the previous (2022/23) tax year, while the payment deadlines in August and February relate to the current (2023/24) tax year.
This means that the 24 January 2024 deadline is the end date for the two declarations made during 2022/23 provisional tax year, and the deadline for the 2023/24 tax year will be in January 2025.
- 30 August 2022 – 2022/23 Provisional tax payment 1
- 23 January 2023 – 2021/2022 tax deadline
- 28 February 2023 – 2022/23 Provisional tax payment 2
- 31 August 2023 – 2023/24 Provisional tax payment 1 (Current year)
- 24 January 2024 – 2022/23 Provisional tax deadline
- 29 February 2024 – 2023/24 Provisional tax payment 2 (Current year)
- January 2025 – 2023/24 Provisional tax deadline (Current year)
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