A SME client has a June 2009 year end . It is very difficult to establish it's profits before year end for various reasons. Is the "hold on penalties" that was announced for the February provisional payments still applicable for this taxpayer ? Can they still base their second payment on the last assessment or do we we have to make an estimate of actual profits.


The legislation that provided for the new penalty regime on provisional tax payments was promulgated on the 8th of January 2009. For the February 2009 provisional tax payments SARS decided to apply the previous penalty regime. As far as we are aware this exception was only for the February 2009 provisional tax returns and are not still applied.

The draft Taxation Laws Second Amendment Bill, 2009, proposes to add the following paragraph to paragraph 20 of the Fourth Schedule:

“(2A)Where the taxpayer has followed the basis prescribed by the Commissioner for determining the estimate referred to in subparagraph (1), which basis must take into account the loss to the State as a result of its adoption, the size of the taxpayers to which it applies, and any other relevant circumstances, the Commissioner must remit the additional taxes.”.