What is the implication on the tax payer if he/she does not submit an IRP6 to SARS?

If a taxpayer is liable for provisional tax and fails to submit an IRP6 return, he/she will be charged interest and/or penalties for non submission of the IRP6 at the time of the income tax return assessment.


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Who qualifies as a Provisional Tax payer?

With reference to the definition of a provisional taxpayer in Paragraph 1 of the Fourth Schedule of the Income Tax Act No.58 of 1962, a provisional taxpayer is :

  • Any person ( other than a company) who derives income , other than remuneration or an allowance or advance as contemplated in section 8(1) .
  • Any company excluding Public Benefit Organizations and Recreational clubs.
  • Any person who is notified by the commission that the said is a provisional taxpayer.

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What is the purpose of submitting Provisional Tax?

The purpose of Provisional Tax is to allow a taxpayer to pay Income Tax during the tax year in which the income is earned.

By paying the amounts due in terms of the provisional tax liability, the taxpayer will prevent large amounts of tax due on assessment, as the tax load is spread over the relevant year of assessment.


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When will the income statement for a trust tax return be needed, while completing the Income Tax return for trusts (ITR12T)?

The Income statement of the trust will only be needed where income has been received in the trust. You do however need to file a “zero” tax return through to SARS should you only have assets within the trust that does not generate any type income.


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What is the difference between a trust contribution/donation/distribution for the purpose of a trust tax return?

Guidelines in respect of declaring contributions/donations/distributions in the trust return:

  • A contribution to a trust is normally made by the donor/founder/settlor of the trust (maybe thought of as akin to a capital contribution to a company by a shareholder). A contribution can take the form of a donation, but not all donations are contributions. Where a donation is made by the founder/settlor/donor of the trust it should be treated as a contribution in the contest of a trading trust an amount contributed to the trust in exchange the right of future benefits from the trust must also be treated as a contribution.
  • A donation to a trust refers to amounts paid to the trust by a person ( other than the donor/founder/settlor of the trust) in the manner that is gratuitous or with this interested benevolence ( i.e. not in exchange for a right to future benefits).
  • A distribution by a trust refers to amounts vested in the trust beneficiaries.

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