TAX517

Topic 3:
Self Assessment System
for Company
 LEARNING OUTCOME
Ability to:
• Determine the estimated tax payable, revision of
estimated tax payable and due date for monthly
submission
• Determine the Penalties on underestimates of
income tax payable and monthly installment
• Determine submission of return and due date
• Determine the final payment of income tax
• Determine self-assessment for new company
(including small and medium enterprises)
 Self assessment system for company
(SAS)
Effective from YA2001 – basis period for FYE 2001

Under SAS, each and all companies are required to furnish an estimate
of income tax payable for YA via Form CP204.

Operation guideline 1/2017 – updated information on tax estimates

under s 107C

WHEN?
not later than 30 days before the beginning of the basis period [S
107C(2)].
➢ For example:
Company Y/E is 31 May each year. YA2018 would be from 1.6.2017 –
31.5.2018. Therefore, the company must submit the estimate for YA2018
via Form CP204 latest by 1.5.2017.
 Self assessment system for company
(SAS)
HOW MUCH?
The estimate of income tax for a YA must not less than 85%
of the estimate or revised estimate of the income tax payable
for the immediate preceding YA.
For example:
➢ Estimate for YA2017 = RM100,000
➢ Estimate for YA2018 = must not less than 85% of the YA2017
estimates, i.e. 85% of RM100,000 = RM85,000
➢ If there is any revised estimate, eg. to RM120,000 for YA2017,
hence, estimate for YA2018 = ≥ 85% of RM120,000, i.e.
RM102,000
 Self assessment system for company
(SAS)
ADMINISTRATION?
The estimate of income tax payable can be submitted manually through
Form CP204 or e-filing via e-CP204
W.e.f. YA 2018 – estimate (CP204) or revised estimate (CP204A) of tax
payable by companies should be submitted through e-filing (compulsory)
– s 107C(7A)
Online submission via https://ez.hasil.gov.my/
Information needed in CP204:
-name and address -commencement date of operation
-income tax reference -computation of monthly installments
-company registration number -withholding tax obligations (only for NR)
-tax estimates (current YA) -YA
-accounting year end and basis period
 Non-submission of tax estimates –
An offence under s 120(1)(f). Upon conviction,
company shall be liable to :
a) RM200 ≤ fine ≤ RM20,000; or
b) Imprisonment for a term ≤ 6 months; or
c) Both
 SAS – PAYMENT OF MONTHLY TAX
INSTALMENTS
IRB will issue notice of payment (CP205) and 12 monthly
installments payment slip (CP207) – before commencement
of beginning of basis period
Due on the 15th of every month commencing from the
second month of the basis period (w.e.f 1.1.2015).
10% penalty will be imposed for unpaid amount/late
payment on the specified date– s 107C (9).
For example:
Year-end Instalment begins Instalment ends
31 January 2018 (1/2/2017-31/1/2018) 15 March 2017 15 February 2018

29 February 2018 (1/3/2017-29/2/2018) 15 April 2017 15 March 2018

SAS – PAYMENT OF MONTHLY TAX
INSTALMENTS

Every company is required to pay the tax in an equal 12

monthly installments.
If the taxpayer does not have a 12-month accounts for a YA,
then the estimated tax payable for that year will be divided
by the number of months of that YA
No of instalment Due date Amount of instalment

1st 15.2.2017
2nd 15.3.2017
3rd 15.4.2017
4th 15.5.2017
5th 15.6.2017
6th 15.7.2017
7th 15.8.2017
8th 15.9.2017
9th 15.10.2017
10th 15.11.2017
11th 15.12.2017
12th 15.01.2018
 SAS – REVISION OF TAX ESTIMATE
(CP204A) – S 107C(7)
W.e.f YA 2013 –
revision of The tax payable If the revised
estimate can be for the remaining estimates is less
made in the 6th or months will be than the total
9th month or in revised upward or installments paid,
both months of downward the installment
the basis period accordingly. cease
for a YA (via immediately.
Form CP204A)

• Example (downward revision) (FYE 31/12/2018 – 1/1/2018-31/12/2018):

➢ Original estimate RM120,000. So monthly installments = RM120,000/12 =
RM10,000.
➢ Revised estimate in the 9th month (i.e. September 2018) to RM80,000. Total
installments paid until September 2018 is RM10,000x8 (installment payment
started on the 15th of 2nd month)=RM80,000.
➢ Since the revised is equal to the total installments paid, no more remaining
installment that have to be paid by the taxpayer
REVISION OF TAX ESTIMATE – CONT’D

• Example (upward revision):

➢ Original estimate RM120,000. So monthly instalments =

RM120,000/12 = RM10,000. FYE 31 December every year.

➢ Revised estimate in the 6th month to RM150,000.

SAS – PENALTY ON UNDERESTIMATION OF
INCOME TAX PAYABLE – S107C (10)
• 10% penalty will be imposed on the excess of 30% difference between the
original/revised estimate and the actual tax payable upon submission of
tax return (Form C).

• A company is obliged to revise upward either in the 6th or the 9th month of
the basis period to reflect the actual possible tax payable for that YA to
avoid any possibility of penalty due to underestimation of income tax

• Eg.

Actual income tax payable RM84,000

(-) original/revised estimate (RM42,000)
Shortfall RM42,000
(-)Margin of error (30% of actual income tax payable) (RM25,200)

Excess over RM25,200 RM16,800

Penalty of 10% RM1,680
 SAS – SUBMISSION OF
RETURN – S 77A(1)
Submission of return (Form C) for a YA need to be done within 7 months from the
closing date of the company’s year end – together with the payments of (not later
than the last day of the 7th month):

1. Outstanding tax payable – final tax liability

2. Penalty on 30% difference

3. Late payment penalty

PENALTY FOR LATE PAYMENT

➢ If the balance of tax payable is not paid by the due date, a penalty of 10% will be
imposed on the outstanding amount.

➢ If the tax payable and penalty is still outstanding within 60 days from the due date,
an additional penalty of 5% will be imposed on the tax and penalty outstanding
(abolished with effect from 1.1.2020.)
 NOTICE OF ASSESSMENT
The return submitted is deemed to be a notice of
assessment.

This is the self assessment system whereby there

would not be any Form J to be issued to a company
by the IRB

The taxpayer has the right to appeal within 30 days

from the date of submission.
 AMENDMENT OF RETURN
– S 77(B)
• W.e.f YA 2009, amendment of return is allowed (only once)
within 6 months from the date of submission to IRB
• The amended return shall specify:
1. The additional amount of chargeable income
2. The additional amount of income tax payable
3. The particulars
4. The late payment penalty
• The submission of the amended return is deemed a notice of
assessment
COMMENCEMENT OF NEW COMPANY
– S 107C (4)
Submit Form CP204 within 3 months from the date of
commencement.
No. of installments= the length of its BP
The first installment will commence in the 6th month of the BP
This tax treatment applies to company with paid up capital at
the beginning of YA > RM2.5 million (non-SME)
W.e.f YA 2011, when a company commence operation in a YA and
the basis period is less than 6 months – not required to furnish
estimate of tax payable and make installment payment for that
YA
COMMENCEMENT OF NEW COMPANY
(SME)– S 107C (4A)

• Where a SME first commence business operation in a YA,

the company is not required to:

1. Estimate income tax payable to IRB (but still have to

submit the prescribed form CP204) .

2. Pay monthly income tax payable on the 15th of each month

For that YA and immediate following YA (2 years).

 COMMENCEMENT OF NEW COMPANY
(SME)– S 107C (4A)

• W.e.f YA 2014, If no BP for that YA and the immediate

following YA, SME is not required to furnish and estimate of
tax payable for that year and for immediate 2 following
YAs (3 years)

• Eg. An SME starts business on 1 November 2016 and closes

the first sets of accounts on 31 January 2018.
YA 2016 2017 2018 2019 Legislation
Basis period No No Yes Yes Sec 21A(4)(c)

Estimate of tax Not required Not required Not required Required Sec 107(4A)(c)
payable