CP204 is the form used by companies in Malaysia to declare their estimated tax payable for the current financial year. The company is required to pay the estimated tax in monthly installments. These payments help reduce the burden of paying a large lump sum at the end of the year. However, underestimating your taxes can lead to penalties, while overestimating may affect your cash flow. That’s why it’s important to get your CP204 figures right and review them if your business performance changes significantly throughout the year.
Submission deadline
- For existing companies: Form CP204 must be submitted 30 days before the commencement of the basis period for the year of assessment. For example, if the financial year starts on January 1, the form should be submitted by November 30 of the previous year.
- For newly incorporated companies: The form must be submitted within 3 months from the date of commencement of business operations.
Tax installments
- For existing companies: Monthly installments begin in the second month of the basis period. For instance, if the basis period starts on January 1, the first installment is due by February 15.
- For new companies: Installments commence in the 6th month after the company starts operations.
Penalties for Non-Compliance
- Failure to submit: Fines ranging from RM200 to RM2,000, or imprisonment for up to 6 months, or both.
- Late payment: A 10% penalty on the unpaid amount.
- Underestimation: If the actual tax payable exceeds the estimate by more than 30%, a 10% penalty on the difference applies.
To know more, refer here.