4.Estimation of Tax Payable (CP 204)

Estimation of tax payable

            Under the Self Assessment System, every company/co-operative society/trust body/unit trust is required to furnish an estimate of it's tax payable for a year of assessment. This has to be done not later than 30 days before the beginning of the basis period.

            In respect of a company/co-operative society/trust body/unit trust that has just commenced operation, the estimate of tax payable for the current year may be furnish within 3 months from the date of commencement of operation.

            The estimate of the tax payable for the current year of assessment should not be less than the estimate of tax to be paid for the immediate preceding year of assessment.

            With effect from the year of assessment 2006, the estimate of tax payable for a current year by the company should not be less than 85% of the revised estimate of tax payable for the immediate preceding year of assessment. If there is no revised estimate furnished, current year tax estimate should not be less than 85% of the estimated tax payable for the immediate preceding year of assessment.

A company which has just commenced business can estimate the tax payable for the first year of assessment based on estimated company profits. The estimated tax payable for the first year will be the basis for the tax estimate for the next year of assessment.

Example

 

            ABC Sdn Bhd has furnished estimate for the year of assessment 2009 amounting to RM50,000. In the 6th / 9th month, the company revises the tax estimate to     RM100,000. The revision is agreed by IRB. Therefore for year assessment 2010, ABC Sdn Bhd has to furnish a tax estimate of at least RM85,000 (85% from the revised estimate of the year assessment 2009).

 

Submission of Tax Estimation (CP204 Form)

            An existing company is required to furnish estimation of tax payable not later than 30 days before the beginning of the basis period for a year of assessment. However, a company that has just commenced business has to furnish the estimate of tax payable within 3 months from the date the company commences business.

Example 1:

            The basis period for company ABC Sdn. Bhd. is from 01/07/2008 to 30/06/2009 for the year of assessment 2009.

            The company has to submit CP204 form not later than 31/05/2008 (30 days before the beginning of the basis period).

Example 2:

            DEF Sdn. Bhd was incorporated on 25/02/2009. The company commenced its business on 01/04/2009 and the first financial accounts were prepared up to 31/12/2010.

           

            The company has to submit CP204 form not later than 30/06/2009 (3 months from the date the company commenced its business).

(Note: The Form CP204 can be download HERE)