You are a tax practitioner and are responsible for calculating the provisional tax payments for one of your clients, Bloom (Pty) Ltd. The company’s year of assessment ends on 29 February 2020 andit is not a small business corporation as defined in the Income Tax Act. On 29 August 2019, you gather and summarize the following relevant information:

Year of assessment Taxable income Date assessment was received 2019 R1 850 222 (not yet assessed) - 2018 R1 745 000 (assessed) 21 August 2019 2017 R1 485 325 (assessed) 21 December 2018 On 27 February 2020, you gather the following additional information: Year of assessment Taxable income Date assessment was received 2019 R1 850 222 (assessed) 8 January 2020 2020 R2 001 400 (estimated calculation) -

REQUIRED: MARKS Calculate the first and second provisional tax payments of Bloom (Pty) Ltd for theyear of assessment ending 29 February 2020 and specify by which dates both provisional tax payments must be made. Provide short reasons why you used the chosen basic amount for the first provisional tax payment calculation. 10

PART B (15 marks) Unique clothing (Pty) Ltd is a South African company that imports and sells designer clothing to boutiques across South Africa. On 24 March 2020, the head fashion designer placed an order for clothing valued at R230 000 with an overseas company. The contractual agreement between the two parties states that Unique clothing (Pty) Ltd only needs to pay the full order value to the overseas company on condition that the items arrive undamaged at the company’s premises in Johannesburg. The clothing items arrived undamaged in Johannesburg on 13 April 2020. Unique clothing (Pty) Ltd’s year of assessment ends on 31 March 2020.

REQUIRED: MARKS List the requirements and discuss whether the clothing order value of R230 000, will be deductible by Unique clothing (Pty) Ltd in terms of the general deduction formula (section 11(a) of the Income Tax Act, read with section 23) for the year of assessment ending 31 March 2020. Remember to provide a conclusion. Note: You must state one relevant court case in your discussion regarding the “actually incurred” requirement.