Continuation from Income Tax Deadlines for Companies (Part 1)
4. Revision of estimates
A revised estimate of tax payable may be furnished to the IRB in the sixth month of the basis period of a year of assessment (but not any earlier). An additional revision in the ninth month of the basis period is allowed from YA 2003. The revision must be made by submitting the Form CP204A. When there is a change in the company’s accounting period, Form CP204A should only be furnished together with the notification (Form CP204B) if the change is notified in the sixth or ninth month of the basis period for that year of assessment.
If the revised estimate exceeds the tax instalments paid for the year, the difference will be payable in the remaining instalments in equal proportion. Conversely, if the tax instalments paid for the year exceeds the revised estimate, the remaining instalments will cease immediately. However, if the lower revised tax estimate is due to a change in accounting period (shortened) and the notification is notified after the end of the basis period, the revised estimate will not be accepted. The original monthly instalment shall continue until the date of notification of the change in accounting period via Form CP204B is received by the Director General of Inland Revenue. Where the accounting period is extended, the instalment to be paid for the extended accounting period is the original instalment. The monthly instalment for the extended period shall not be less than the monthly instalment for the original accounting period.
Continuing from the example of C Sdn. Bhd. above, C Sdn. Bhd. for its financial year ended 30 June 2010 (original estimate of RM120,000) can submit a revised estimate in the month of December 2009 or March 2010. If the revised estimate is MORE than the instalments already paid, the excess will be spreaded evenly over the remaining instalments.
(Assume estimate is made in the 6th month of the company’s basis period)
The balance of RM77,000 will be paid by 7 monthly instalments of RM11,000 each.
Do take note that the ability to revise the tax estimation DOES NOT APPLY where an original estimate as explained in note 1 (see Income Tax Deadlines For Companies (Part 1)) is not made by the company. Therefore, it is VITAL that the company submits an original estimate to the Director General not later than thirty days before the beginning of the basis period for that year of assessment.
5. Late payment penalty
Where any instalment amount due and payable has not been paid by the due date or on the date specified by the Director General, the amount unpaid shall, without any further notice being served, be increased by a sum equal to 10% of the amount unpaid, and that sum shall be recoverable as if it were tax due and payable under this Act.
6. Actual tax payable exceeds furnished estimates
The difference between the tax payable and the amount of estimated tax payable under an assessment for a year of assessment shall be due and payable on the due date whether or not that company appeals against the assessment. The “due date” means the last day of the seventh month from the date following the close of the accounting period.
In C Sdn. Bhd.’s example, as the company’s year end is 30 June 2010, the difference between the company’s actual tax payable and the amount of estimated tax payable, must be settled on or before 31 January 2011.
Where the tax payable under an assessment for a year of assessment exceeds the revised estimate of tax payable for that year of assessment or if no revised estimate is furnished, the estimate of tax payable for that year of assessment, by an amount of more than 30% of the tax payable under the assessment, then, without any further notice being served, the difference between that amount and 30% of the tax payable under the assessment shall be increased by a sum equal to 10% of the amount of that difference, and that sum shall be recoverable as if it were tax due and payable under the Income Tax Act.
In C Sdn. Bhd.’s example, if the company’s final tax liability is RM200,000, then:
7. Submission of tax return form
From YA 2001, companies are required to submit its returns in a prescribed form within 7 months from the date following the close of accounting year end.
E Sdn. Bhd.’s year end is 30 June 2011, so the last day to submit its tax return is 31 January 2012.
Default in furnishing return under s77(1) or give notice of chargeability under s77(2) or 77(3):
- Penalty equal to 3 times the amount of tax (s112(3)) (Without prosecution).
- RM 200 to RM2,000 or 6 months imprisonment or both. (With prosecution)
8. Summary of tax estimation and submission process
The diagram below illustrates the typical tax filing deadlines of a company with a financial year ending 31 December: