Tick-tock, time is running out for non-provisional taxpayers to submit their 2022 tax return. The filing deadline of 24 October 2022 is just around the corner.

Provisional Taxpayers: your tax return filing deadline is 23 January 2023. Breathe easy.

If you ‘think’ you are a Provisional Taxpayer, we strongly suggest you make 100% sure you meet the definition of a Provisional Taxpayer each year.  If you file after the 24 October deadline, because you mistakenly think you are Provisional Taxpayer (but are actually not for 2022) SARS will immediately penalise you. SARS have recently got a lot stricter with penalties and there will be no leeway granted. For more on admin penalties, please read here.

Who meets the definition of a Provisional Taxpayer?

Provisional Taxpayers are people who earn income other than a salary or remuneration. 

Example of other types of income include freelancer or sole proprietor income, rental income, interest and investment income.

Note, if your employer does not withhold PAYE on your salary (e.g they are a foreign employer), then you would also be a Provisional Taxpayer.

Freelancer or sole proprietor income

It is important to highlight that if you earn any income (doesn’t matter how little!) from freelancing or running your own business and your total taxable income (i.e. income less business expenses) is above the tax threshold, then you will be a Provisional Taxpayer. You can check the tax thresholds for 2022 here.

Rental, interest and investment income – R30 000 limit applies

If you don't earn income freelancer or sole proprietor income, but your total taxable income (i.e. income less expenses) from interest, dividends and rental income is greater than R 30 000 per year, and your total taxable income is greater than the tax threshold, then you will be a provisional taxpayer.

It’s very important that taxpayers understand the R30 000 limit and how it applies to their situation. This is best illustrated by way of an example.

Let’s assume you earn a salary and you also earn rental income.  You are registered as a Provisional Taxpayer and you file provisional tax returns (i.e IRP6s) each year. In 2021, your taxable rental income was R35 000. In 2022, your tenant moved out and your taxable rental income dropped to R10 000 for the tax year. Because your taxable rental income is below the R30 000 limit, you do NOT meet the definition of a Provisional Taxpayer for 2022. This means that your tax return filing deadline will be 24 October 2022. If you file after 24 October 2022, you will receive admin penalties from SARS.

NB: Check for Auto-Assessments

If SARS has issued you an auto-assessment, and you have not yet submitted your tax return, your 40 working day deadline to submit a tax return will have passed. In this case, you must apply for an extension BEFORE you submit your tax return. Please click here for steps to submit a Request for Extension.

Auto-assessed taxpayers who submit their tax returns after the deadline and who have NOT requested an extension, are facing delays and challenges with finalising their tax returns. Please try to avoid this!

Key Takeaways

Just because you are registered as a Provisional Taxpayer on eFiling (and you diligently file provisional returns every year) does not automatically mean you meet the definition of a Provisional Taxpayer. You must look at your taxable income from rental, interest and investment income each tax year to make sure it is above R30 000. If you don’t meet the definition, the earlier filing deadline for non-provisional taxpayers will apply to you. If you are unsure, you can check our handy decision tree here.

SARS will levy admin penalties if you are just a day late with your tax return submission, so don’t be caught out!

And lastly, check for Auto-Assessments and make sure you follow the extension process correctly.