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Income Tax Act, 1962 (Act No. 58 of 1962)

Schedules

Fourth Schedule : Amounts to be Deducted or Withheld by Employers and Provisional Payments in respect of Normal Tax

Part III : Provisional Tax

19. Estimates of taxable income to be made by provisional taxpayers

 

(1)        

(a) Every provisional taxpayer (other than a company) shall, during every period within which provisional tax is or may be payable by that provisional taxpayer as provided in this Part, 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 in respect of which provisional tax is or may be payable by the taxpayer: Provided that such estimate will not include any retirement fund lump sum benefit, retirement fund lump sum withdrawal benefit or any severance benefit received by or accrued to or to be received by or accrue to the taxpayer during the relevant year of assessment.

[Paragraph 19(1)(a) of the Fourth Schedule substituted by section 16(a) of the Tax Administration Laws Amendment Act, 2015 (Act No. 23 of 2015)]

(b) Every company which is a provisional taxpayer shall, during every period within which provisional tax is or may be payable by it as provided in this Part 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 company in respect of the year of assessment in respect of which provisional tax is or may be payable by the company.

[Paragraph 19(1)(b) of the Fourth Schedule substituted by section 16(a) of the Tax Administration Laws Amendment Act, 2015 (Act No. 23 of 2015)]

(c) The amount of any estimate so submitted by a provisional taxpayer (other than a company) during the period referred to in paragraph 21(1)(a), or by a company (as a provisional taxpayer) during the period referred to in paragraph 23(a), shall not be less than the basic amount applicable to the estimate in question, as contemplated in item (d), unless the circumstances of the case justify the submission of an estimate of a lower amount.

[Paragraph 19(1)(c) of the Fourth Schedule substituted by section 16(a) of the Tax Administration Laws Amendment Act, 2015 (Act No. 23 of 2015)]

(d) The basic amount applicable to any estimate submitted by a provisional taxpayer under this paragraph shall for the purposes of this paragraph, be deemed to be—

[Words preceding paragraph 19(1)(d)(i) of the Fourth Schedule substituted by section 18 of the Revenue Laws Amendment Act, 2008 (Act No. 61 of 2008)]

(i) as respects an estimate submitted by a provisional taxpayer (other than a company) under item (a), the taxpayer’s taxable income, as assessed by the Commissioner, for the latest preceding year of assessment in relation to such estimate, less
(aa) the amount of any taxable capital gain contemplated in section 26A;

[Paragraph 19(1)(d)(i)(aa) of the Fourth Schedule substituted by section 9(1)(a) of the Tax Administration Laws Amendment Act, 2014 (Act No. 44 of 2014) - effective 1 March 2015]

(bb) the taxable portion of any retirement fund lump sum benefit, retirement fund lump sum withdrawal benefit or severance benefit (other than any amount contemplated in paragraph (eA) of the definition of "gross income" in section 1;

[Paragraph 19(1)(d)(i)(bb) of the Fourth Schedule substituted by section 9(1)(a) of the Tax Administration Laws Amendment Act, 2014 (Act No. 44 of 2014) - effective 1 March 2015]

(bbA) any amount (other than a severance benefit) contemplated in paragraph (d) of the definition "gross income" in section 1,

[Paragraph 19(1)(d)(i)(bbA) of the Fourth Schedule inserted by section 9(1)(a) of the Tax Administration Laws Amendment Act, 2014 (Act No. 44 of 2014) - effective 1 March 2015]

(cc) [Paragraph 19(1)(d)(i)(cc) of the Fourth Schedule deleted by section 13(1)(c) of the Tax Administration Laws Amendment Act, 2013 (Act No. 39 of 2013) - effective 1 March 2012]

included in the taxpayer's taxable income for that year of assessment;

[Paragraph 19(1)(d)(i) of the Fourth Schedule substituted by section 54(1)(b) of the Revenue Laws Revenue Laws Amendment Act, 2004 (Act No. 31 of 2005 - effective 1 March 2006]

(ii) as respects an estimate submitted by a company under item (b), the company’s taxable income, as assessed by the Commissioner, for the latest preceding year of assessment in relation to such estimate, less the amount of any taxable capital gain included therein in terms of section 26A:

[Paragraph 19(1)(d)(ii) of the Fourth Schedule substituted by section 37 of the Taxation Laws Amendment Act, 2001 (Act No. 5 of 2001)]

(iii) [Paragraph 19(1)(d)(iii) of the Fourth Schedule deleted by section 44(c) of the Income Tax, 1995 (Act No. 21 of 1995)]

Provided that, if an estimate under item (a) or (b) must be made more than 18 months after the end of the latest preceding year of assessment in relation to such estimate, the basic amount determined in terms of subitems (i) and (ii) shall be increased by an amount equal to eight per cent per annum of that amount, from the end of such year to the end of the year of assessment in respect of which the estimate is made.

[Proviso to paragraph 19(1)(d) of the Fourth Schedule substituted by section 9(1)(b) of the Tax Administration Laws Amendment Act, 2014 (Act No. 44 of 2014) - effective 1 March 2015]

(e) For the purposes of item (d), the latest preceding year of assessment in relation to any estimate under this paragraph shall be deemed to be the latest of the years of assessment—
(i) preceding the year of assessment in respect of which the estimate is made; and
(ii) in respect of which a notice of assessment relevant to the estimate has been issued by the Commissioner not less than 14 days before the date on which the estimate is submitted to the Commissioner.

[Proviso to paragraph 19(1)(e)(ii) of the Fourth Schedule deleted by section 9(1)(c) of the Tax Administration Laws Amendment Act, 2014 (Act No. 44 of 2014) - effective 1 March 2015].

 

(1A) [Paragraph 19(1A) of the Fourth Schedule deleted by section 49(e) of the Income Tax Act, 1983 (Act No. 94 of 1983)]

 

(2) If any provisional taxpayer fails to submit any estimate as required by subparagraph (1), the Commissioner may estimate the taxable income which is required to be estimated.

[Paragraph 19(2) of the Fourth Schedule substituted by section 271, read with paragraph 90(g) of Schedule 1, of the Tax Administration Act, 2011 (Act No. 28 of 2011)]

 

(3) The Commissioner may call upon any provisional taxpayer to justify any estimate made by the provisional taxpayer in terms of subparagraph (1), or to furnish particulars of the provisional taxpayer's income and expenditure or any other particulars that may be required, and, if the Commissioner is dissatisfied with the said estimate, he or she may increase the amount thereof to such amount as he or she considers reasonable, which increase of the estimate is not subject to objection and appeal.

[Paragraph 19(3) of the Fourth Schedule substituted by section 16(b) of the Tax Administration Laws Amendment Act, 2015 (Act No. 23 of 2015)]

 

(4) [Paragraph 19(4) of the Fourth Schedule deleted by section 50(1)(c) of the Income Tax Act, 1974 (Act No. 85 of 1974) - effective 1 April 1975].

 

(5) Any estimate or increase made by the Commissioner under the provisions of subparagraph (2) or (3) shall be deemed to take effect in respect of the relevant period within which the provisional taxpayer is required to make any payment of provisional tax in terms of this Part.

[Paragraph 19(5) of the Fourth Schedule substituted by section 16(c) of the Tax Administration Laws Amendment Act, 2015 (Act No. 23 of 2015)]

 

(6) Subject to subparagraph (2), if an estimate of a provisional taxpayer’s taxable income in respect of any year of assessment is not submitted in terms of subparagraph (1)(a) or (b) by the last day of a period of four months after the last day of the year of assessment, the provisional taxpayer shall, for the purposes of this paragraph and paragraph 20, be deemed to have submitted an estimate of an amount of nil taxable income.

[Paragraph 19(6) of the Fourth Schedule inserted by section 12 of the Tax Administration Laws Amendment Act, 2016 (Act No. 16 of 2016)]