Guidelines on Submission of Tax Estimate in Malaysia via Form CP204
Submission of tax estimate in Malaysia is mandatory under Section 107C of the Malaysian Income Tax Act, 1967. The prescribed form for initial submission is Form CP204 and for revision of the initial submission is Form CP204A.
How to submit the Estimate of Tax Payable?
By prescribed form CP204.
Due date for submission of CP204 + Monthly Instalment as per Form CP205
Every company is required to determine and submit its estimate tax payable for a year of assessment via Form CP204, not later than 30 days before the beginning of the basis period.
For newly incorporated Companies, the estimate tax payable, must be submitted within 3 months from the date of commencement of its business.
SME is not required to furnish an estimate of tax payable or make instalment payments for a period of 2 years beginning from the year of assessment in which the SME commences operations.
The monthly instalment of the estimated tax is payable by not later than the 15th day of each month.
LHDN's statement via letter on CP204 for SMEs
LHDN has made statements, on the above that, all companies to submit its estimate tax payable via Form CP204, notifying the LHDN of its SME status with a ZERO amount of tax payable to avoid any possible unnecessary penalty due to administrative issues, even though these companies are not required to submit CP204.
If a penalty under Section 107C is imposed or notification of legal proceedings under Section 120 is issued to an SME, you may refer to the LHDN Branch where the Company income tax returns are maintained for waiver of the penalty.
What is SME?
LHDN categorised SME (Small and Medium-Sized Enterprises) as those companies having paid up ordinary share capital of not more than RM2.5 million at the beginning of the basis periods and that it is not controlled by a related company which has a paid up ordinary share capital of more than RM2.5 million at the beginning of the basis period for a year of assessment.
How to revise the Estimate of Tax Payable? When?
By using prescribed form CP204A on the 6th and 9th month of the basis period.
Any revision other than the above months, required an appeal letter, subject to LHDN approval.
Revised estimate of tax payable for a year of assessment shall not be less than 85% the estimate tax payable (CP204) or the revised estimate tax payable (CP204A) furnished for the immediately preceding year of assessment.
To apply for a tax estimate of less than 85% of the previous estimate or revised estimate, a letter of appeal for the lower estimate with supporting documents to be submitted to Pusat Pemprosesan Maklumat, LHDN.
Penalties with regards to Estimate Tax Payable
Failure to furnish Estimate Tax Payable, Form CP204 - Liable to a fine ranging from RM200 to RM2,000 or face imprisonment or both.
Fails to pay the monthly tax estimate instalment by 15th of the month, a late payment penalty of 10% will be imposed on the balance of tax instalment not paid for the month.
If the difference between the actual tax payable and the estimated tax payable is more than 30%, a 10% penalty will be imposed on that difference.
If form CP204 is not furnished, but the Company has tax payable, such final tax payable shall without any further notice be increased by 10% and that sum shall be recoverable as if it were tax due and payable under the Income Tax Act.