Check your provisional status: SAIPA

Taxpayers must check their provisional status to avoid penalties, the SA Institute for Professional Accountants (SAIPA) says.

In a statement, SAIPA said the SA Revenue Service (SARS) was no longer automatically sending requests for returns to provisional taxpayers.

However, provisional taxpayers had to complete their first returns for the current tax year by the end of August 2010 or face possible penalties.

According to Ettiene Retief, the chairman of SAIPA's national tax technical sub-committee, you are a provisional taxpayer if you receive income that is not remuneration or if you receive income from a sideline business or trade as a sole proprietor.

You are also considered a provisional taxpayer if you receive taxable income from property rental, interest or dividends of more than R20,000 a year or if you are a contractor or consultant.

Retief warned that failure to complete a provisional tax return could result in the taxpayer being penalised by SARS.