Provisional tax
Also known as: provisional taxpayer, IRP6
A SARS system of paying tax in advance during the year, which can apply if you earn significant crypto income not subject to PAYE.
Definition
Provisional tax requires taxpayers with substantial income not taxed at source to pay estimated tax in advance, usually in two payments during the year, via the IRP6. Active crypto traders or those with meaningful crypto income may become provisional taxpayers. Underestimating can lead to penalties and interest, so estimating crypto gains accurately during the year matters.
Example
You actively trade crypto and have no employer withholding tax. You likely register as a provisional taxpayer and pay estimated tax twice during the year.
Jurisdiction notes
- South Africa: Crypto traders with income not subject to PAYE may be provisional taxpayers and must estimate tax via the IRP6 during the year.