Provisional Tax 2025: How to Avoid SARS Underestimation Penalties
- Rico de Villiers
- Aug 17
- 2 min read
If you are a provisional taxpayer, your next IRP6 submission is due by 31 August 2025. Filing late or underestimating your taxable income can trigger costly penalties and interest from SARS. Here’s how to get it right the first time.
What is Provisional Tax?
Provisional tax helps taxpayers spread their income tax liability over the year instead of paying it in one lump sum at year-end.
It is not a separate tax — it’s a way of paying income tax in advance.
It applies to companies, trusts, and individuals who earn income not subject to PAYE, such as business profits, rental income, and investment returns.
Understanding Underestimation Penalties
SARS charges penalties if:
Your first and second payments are less than the required percentage of your final taxable income.
Your final taxable income differs significantly from your estimates.
Formula SARS uses: Penalty = 20% × (Tax on Actual Income – Tax on Estimate)
(Interest may also be charged at the prescribed rate.)
How to Estimate Accurately
Use Year-to-Date Figures – Base your projection on actual results plus a realistic forecast.
Include All Income Streams – Don’t forget rental, investment, or foreign income.
Review Your Deductions – Ensure they are legitimate and supported by documentation.
Common Mistakes to Avoid
Submitting your IRP6 late.
Ignoring additional income sources.
Relying on outdated forecasts.
Forgetting to adjust for seasonal fluctuations in turnover.
Novum Insight
We recommend preparing interim financial statements before the August submission. This provides a reliable base for your tax estimate and helps avoid nasty surprises when SARS issues your assessment.
Novum Tax Masters can calculate your accurate provisional tax liability and submit your IRP6 on time — protecting you from penalties and interest.
Using the latest technology from Xero Gatekeeper, our integration directly to E-filing and your data in Xero ensures accurate and timeous submissions.
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