Submission of Estimated Tax Payable Under Section 107C of The Income Tax Act 1967 (ITA)

Taxpayers categorized as companies, limited liability partnerships (LLPs), trusts, and cooperatives are required to submit the Estimated Tax Payable Form (Form CP204) annually and pay the estimated tax according to the prescribed schedule.

Submission of Form CP204 and Revised Estimate of Tax Payable Form (Form CP204A) via e-Filing under Subsection 107C(7A)

1. Companies are required to submit Form CP204 and Form CP204A via e-Filing starting from the Year of Assessment 2018.
2. LLPs, trusts, and cooperatives are required to submit Form CP204 and Form CP204A via e-Filing starting from the Year of Assessment 2019.

The submission method utilizes a digital certificate through:

1. The Tax Agent e-Filing System (TAeF) for all types of tax files.
2. The Organization e-Filing System (OeF) for company directors across all file categories.

e-CP204 Submission Period

• For companies already in operation:
  
  Under subsection 107C(2) of the ITA, companies, LLPs, trusts, and cooperatives that are already operating must submit the e-CP204 no later than 30 days before the commencement of the basis period for a year of assessment.

• For newly established companies:
  
  Under paragraph 107C(4)(a) of the ITA, for companies, LLPs, trusts, and cooperatives that are newly established and have a first basis period of not less than six (6) months for a year of assessment, the e-CP204 must be submitted within three (3) months from the date operations begin.

  The requirement to submit the e-CP204 no later than 30 days before the commencement of the basis period for a year of assessment, as stated under subsection 107C(2) of the ITA, applies only starting from the second year of assessment, according to paragraph 107C(4)(b) of the ITA.

• Example:
  Basis period for a new business in operation for not less than six (6) months
  

  • • Mawar Sdn. Bhd. was incorporated on 27.02.2021 and commenced business operations on 03.04.2021. Its first accounting period ended on 31.12.2021 (9 months). The company must submit the e-CP204 for the Year of Assessment 2021 no later than 30.06.2021, which is three (3) months from the commencement date of its business operations.

      Monthly installment payments will commence in the 6th month of the basis period for the Year of Assessment 2021, i.e., from the September 2021 installment to May 2022.

    • Ros Sdn. Bhd. was incorporated on 27.02.2021 and commenced business operations on 03.04.2021. Its first accounting period ended on 31.12.2021 (9 months). The company must submit the e-CP204 for the Year of Assessment 2021 no later than 30.06.2021, which is three (3) months from the commencement date of its business operations.

      Monthly installment payments will commence in the 6th month of the basis period for the Year of Assessment 2021, i.e., from the September 2021 installment to May 2022.

Minimum Amount of Estimated Tax

Subsection 107C(3) of the ITA stipulates that the minimum amount of estimated tax for a year of assessment must not be less than 85% of the amount of the revised estimate of tax or the amount of the original estimated tax (if no revision is submitted) for the preceding year of assessment.

Companies, LLPs, trusts, and cooperatives that are newly established can determine the estimated tax payable for the first year of assessment based on the company's projected profits. The estimated tax payable for the first year of assessment will serve as the basis for determining the estimated tax for the subsequent year. The determination of the minimum amount under subsection 107C(3) of the ITA applies only starting from the second year of assessment, as stated in paragraph 107C(4)(b) of the ITA.

Payment Schedule

1. For companies, LLPs, trusts, and cooperatives already in operation, Subsection 107C(5) of the ITA stipulates that the estimated tax payable must be paid to the Director General of Inland Revenue (DGIR) in equal monthly installments, calculated based on the number of months in the basis period. Each installment must be paid no later than the due date, starting from the 2nd month of the basis period for the year of assessment for which the estimate is submitted.

2. For newly established companies, LLPs, trusts, and cooperatives, Subsection 107C(6) of the ITA requires the estimated tax payable to be paid to the DGIR in equal installments, calculated based on the number of months in the basis period. Each installment must be paid no later than the due date, starting from the 6th month of the basis period for the year of assessment for which the estimate is submitted.

3. The due date for each installment is the 15th day of the calendar month, as specified under subsection 107C(12) of the ITA.