6.Installment Payment (CP 207)

           With the preprinted Form CP 207 of organization detail, we do forwarding the form together with a cover letter which attach with the detail payment scheme for the clients.

            For existing companies, the estimated tax payable has to be paid in equal monthly instalments beginning from the second month of the basis period for a year of assessment.

Example 1
'

Number of months in basis period = 12 months

Estimated tax payable = RM120,000

Therefore, monthly installment = RM120,000

= RM120,000/12 months = RM10,000

Example 2:

For new companies, instalment payments must commence in the 6th month of the basis period for the year of assessment i.e. payable in the 6th month after the company commences operations. A company is required to pay the instalment of the estimated tax by the 10th day of each month.

With the detail amount and the date, we would analysis a table as below.

(Note: Example is for December year end clients for the year of assessment 2010)

Payment By Installments

            The estimated tax payable has to be paid in equal monthly installments beginning from the second month of the basis period for a year of assessment.

Example

Number of months in basis period = 12 months

Estimated tax payable = RM120,000

Therefore, monthly installment = RM120,000

= RM120,000/12 months = RM10,000

            Each installment is payable by the 10th of the second month. Similarly, for new tax payers, installment payments must commence in the sixth month of the basis period for the year of assessment i.e. payable in the sixth month after the tax payer commence operation.

            All payments of tax to the IRBM must be made using the Remittance Slip (CP 207). Tax payer is required to indicate the Year of Assessment that the payment is made for on the remittance slip.

Late Payment Penalty:

            Any installment not paid by the due date will be increased by 10 % on the amount unpaid. Thus, we would caution in our letter to the clients and do necessary follow up with the clients.  

[Note: Form CP207 can be download HERE]