“This will essentially consist of one annual return with two interim (provisional) payments.
If liable, you will be required to make two interim payments, one for the first six months of the year of assessment (August) and the other for the full year of assessment (February), but after deducting the first interim payment.
An annual income tax return must be filed as part of the annual income tax filing season.
Should it be found that the two interim payments were not sufficient to discharge the final turnover tax that will be determined on submission of the annual tax return, the relevant interest and penalties may apply.
Mrs X has a business that expects to make a turnover of R600,000 per annum.
Mrs Xs tax liability according to the prescribed turnover tax table is R9,500 for the 2013 year of assessment. In line with expectations, Mrs X will be expected to pay half of the R9,500 (R4,750) within six months from the beginning of the year of assessment and the next half (R4,750) by the last day of February.
A third payment may be necessary where, for some reason, Mrs X underestimated her turnover for the year.
Lets say she found that her turnover for the year was actually R650,000 instead of R600,000. This means that her tax liability for the year should have been R11,500 instead of R9,500. She will then have an opportunity to settle the underpayment of R2,000 (R11,500 less R9,500) upon assessment of her final income tax return which will indicate the final tax liability.
This can be illustrated as follows:
Estimated turnover for the year R600,000
Interim payment 1 due by 31 August R4,750
Interim payment 2 due by last day of February R4,750
Actual turnover per final annual tax return R650,000
Shortfall/final turnover tax payment with annual tax return R2,000
Total turnover tax payable for the year of assessment R11,500
It must be noted that the taxable turnover estimate for the first interim payment must not be less than the taxable turnover of the previous year of assessment, unless SARS agrees. Where the estimate of the taxable turnover for the second interim payment is less than 80 percent of the actual taxable turnover for the year of assessment, additional tax, equal to 20 per cent of the difference between the:
1.tax payable on 80 per cent of the actual taxable turnover for the year of assessment and
2.the tax payable on that estimate,
3. will be charged. The additional tax may be waived in certain circumstances.
Interest at the prescribed rate will be charged on all late payments and underpayments”