Second provisional tax return explained

As the second provisional tax return deadline approaches on 27 February 2026, provisional taxpayers are urged to take proactive steps to avoid penalties, interest and unnecessary disputes with the South African Revenue Service (SARS).

Siphamandla Buthelezi, chief operating officer and executive head of Platforms at NMG Benefits, says the second provisional return is often misunderstood, yet it plays a critical role in keeping taxpayers compliant and financially prepared.

“The second provisional return is not just an administrative tick-box. It is your opportunity to reassess your income for the full tax year, correct earlier estimates and materially reduce the risk of underpayment penalties. Getting this right can have a direct impact on your final tax outcome and your cash flow,” he says.

The second provisional tax return explained

The second provisional tax return (IRP6) represents your final estimate of taxable income for the year of assessment. It applies to individuals, trusts and companies that earn income not subject to PAYE, such as freelancers, contractors, sole proprietors, investors and many small business owners.

Unlike the first provisional return, which is submitted midway through the tax year and is often based on rough estimates, the second return is submitted when the tax year is almost complete. This allows taxpayers to make a far more accurate assessment using actual income earned to date and realistic projections for the remaining period.

Importantly, SARS expects this estimate to be reasonable. In practice, this generally means:

• Individuals and trusts should estimate at least 90% of actual taxable income; or
• At least 80% of taxable income where SARS’ “basic amount” rules apply.

Failure to meet these thresholds may result in understatement penalties, even if the final tax is paid later.

Who needs to submit a second provisional return?

In general, you must submit if you:

• earn income that is not subject to PAYE.
• receive rental, investment or business income.
• are registered with SARS as a provisional taxpayer.

Early preparation is critical. A structured approach helps reduce errors and risk:

Review income to date

Gather records of all income received during the year, including business revenue, rental income, interest, dividends and capital gains.

Estimate full-year taxable income accurately

SARS allows estimates, but they must be defensible. Use year-to-date results, signed contracts, recurring income trends and known expenses to project the full year.

Calculate tax payable

Determine whether additional tax is due after taking into account the first provisional payment and any PAYE already paid.

Submit via SARS eFiling

The IRP6 must be submitted on eFiling, and any outstanding tax paid by 27 February 2026.

Failing to submit on time or materially underestimating taxable income can result in interest on late or insufficient payments, as well as understatement penalties.

“The biggest mistake taxpayers make is assuming they can ‘fix it later’ at assessment stage. By then, penalties and interest might already have been triggered, even if the original intent was not to underpay,” warns Buthelezi.

Understanding your rights as a taxpayer

Many taxpayers approach SARS with unnecessary fear and are often unaware of their rights. Understanding these rights is an important part of protecting yourself and managing disputes effectively.

Taxpayers are entitled to:

• Fair, respectful and professional treatment.
• Clear reasons for penalties, adjustments or assessments.
• Query or formally dispute assessments they believe are incorrect.
• Seek professional assistance when uncertain or under audit.

With the deadline fixed and SARS increasingly reliant on data-driven compliance and third-party reporting, early preparation is no longer optional.

“Provisional tax is as much about cash flow planning as it is about compliance. When taxpayers understand the process, the risks and their rights, they are far better positioned to make informed decisions and avoid unpleasant surprises,” says Buthelezi.

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