Results 1 to 3 of 3

Thread: Sole Proprietor Y/E Accounts - Where do you post Provisional Tax payments?

  1. #1
    New Member
    Join Date
    Feb 2018
    Location
    Port Elizabeth
    Posts
    7
    Thanks
    3
    Thanked 0 Times in 0 Posts

    Sole Proprietor Y/E Accounts - Where do you post Provisional Tax payments?

    Hi,

    I do the books for my husband on Pastel Accounting - he is a sole proprietor and pays provisional tax twice a year. These payments I capture to the Vat/Tax Provision Account.

    What journal entry would I post to clear the Vat/Tax Provision Account balance for the new financial year?

    Credit Vat/Tax Provision Account (B/S)
    Debit Normal Taxation (I/S)

    Would this be correct?

    Thanking you in advance

  2. #2
    Silver Member
    Join Date
    Aug 2018
    Location
    Johannesburg
    Posts
    262
    Thanks
    0
    Thanked 35 Times in 31 Posts
    Leave the provision as is for now. You need to complete his tax return. Once the tax has been assessed and you have the actual tax figures, DR normal tax (IS) and credit the provision for that amount. If you have overpaid, when SARS refunds the balance, Dr bank Cr provision. If you have underpaid, Cr bank Dr Provision - provision account should clear to nil. You will raise the tax as "last year" entries in your current books, and the cashbook pmt/rec in the current year, when the refund/payment is made.

  3. #3
    New Member
    Join Date
    Feb 2018
    Location
    Port Elizabeth
    Posts
    7
    Thanks
    3
    Thanked 0 Times in 0 Posts
    Hi Kevin

    Thank you for your help! I have made the journal entries for last years tax according to your instructions so only have this years prov tax reflected.

    Another question....is it usual for SARS to not refund an Income Tax overpayment - they owe us R11000.00 odd according to the ITA34 but have not refunded this amount? I have carried it forward into this tax years figures as a credit in the tax provision account.

Similar Threads

  1. Buying over a Sole Proprietor
    By SBC in forum General Business Forum
    Replies: 5
    Last Post: 07-Aug-15, 01:52 PM
  2. [Question] Sole proprietor, VAT and converting to a (Pty) Ltd.
    By Heidivf in forum Tax Forum
    Replies: 1
    Last Post: 07-Nov-14, 01:43 PM
  3. [Question] UIF registration if sole proprietor
    By Newretailer in forum General Business Forum
    Replies: 1
    Last Post: 05-Feb-13, 09:18 PM
  4. Converting a CC to a sole proprietor
    By bantersaurus in forum Tax Forum
    Replies: 11
    Last Post: 17-May-12, 05:00 PM
  5. [Question] Sole Proprietor - is it still legal?
    By Newretailer in forum General Business Forum
    Replies: 6
    Last Post: 07-Sep-11, 11:41 AM

Did you like this article? Share it with your favourite social network.

Did you like this article? Share it with your favourite social network.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •