Provisional Tax Exemption (Paragraph 19 of the Fourth Schedule)

Provisional Tax Exemption (Paragraph 19 of the Fourth Schedule)

• 23 March 2020
• Individuals Tax
• The Tax Faculty

Important:

This Tax Law Change is effective from 15 January 2020, the date of promulgation of Tax Administration Laws Amendment Act, 2019.

Every provisional taxpayer shall, during every period within which provisional tax is payable, submit to the Commissioner (unless the Commissioner directs otherwise) a return of an estimate of the total taxable income which will be derived by the taxpayer in respect of the year of assessment.

If a provisional taxpayer fails to submit a provisional tax return within 4 months after the last day of the year of assessment, the taxpayer is deemed to have submitted a nil return.

In cases where a taxpayer passed away during a year of assessment and no estimate was submitted within four months from the date of death of the taxpayer an underestimation penalty may be levied in terms of section 20 of the Fourth Schedule to the Act.

In order to have this penalty remitted the executor would have to lodge a request for remittance of the underestimation penalty.

Amendment:

An additional proviso (ii) to paragraph 19(1)(a) was inserted that provides that no estimate is required to be made in respect of the period ending on the date of death of the taxpayer in respect of the year of assessment in which the taxpayer dies. Any tax owing will be collected on assessment.

Webinar Commentary

Access commentary and an in-depth technical summary on the Webinar On Demand presented by Prof Jackie Arendse here: https://lnkd.in/gvZF_mQ

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