Every resident company is required to submit the tax returns Form C WITHIN 7 MONTH from the end of the accounting period. For example company with year end on 31 December must submit the tax returns by 31 July.
The tax returns submitted will not subject to a detailed review by the Inland Revenue Board and the tax returns are deemed to be a notice of assessment (Section 90(1B). This is due to the fact that the BURDEN of computing TAX LIABILITY are now on the taxpayer under the self assessment system.
Failure to submit a tax return will constitute an offence under the Income Tax Act and upon conviction, taxpayer will be liable to a fine ranging from RM200.00 to RM2,000.00 or imprisonment for a term not exceeding 6 month or both Section 112(1)
However, if no prosecution is initiated, the taxpayer may require to pay penalty equal to a treble the amount of tax which is payable (before any set-off, prepayment or relief) for that year. Section 112(3)(a)
Frequent ask questions
How is tax estimate for company / corporate case?
A company is require to estimate their tax each year by filling up the Form CP204 each year 30 days before the beginning of the basis period. The tax estimate MUST not less than the previous year. However, NEW business is require to submit the CP204 within 3 months from the date of commencement of its business.
A company is still require to submit the CP204 within the stipulated deadline even if it expected its estimate of tax to be NIL.
How is the tax estimate be paid ?
Upon submitting the CP204 corporate taxpayer is require to pay tax on 12 equal monthly instalments. Commencing on the second month from the closing of its financial year end. Example company year end on 30 June, then the first instalment will be on the 10 of August of the following year.
However, where a company first commence operation, its first instalment will commence from the 6th month of the basis period.
When is the due date for each instalment ?
On the 10th of every month.
When can tax be revised ?
The revision to the first estimate can be made on the 6th month or 9th month of its basis period by submitting the prescribed Form CP204A.
Where the revised estimate exceeds the amount of instalment paid to date, the difference shall be payable in the remaining months of the instalment scheme. Conversely, when the revised less than tax instalment paid to date, taxpayer may discontinue with the original instalment scheme.
What is the penalty like when there are variant between actual tax payable with that of estimate / revised estimate?
When the tax payable exceeds the estimate / revised estimate by an amount exceeding 30% of the tax payable, the difference exceeding the 30% will be subject to a penalty of 10%.
When is the final tax need to be paid ?
On the 7 month following the closing of the company accounting
Failure to remit the balance of tax payable by will result a penalty of 10% on the balance of tax payable and another 5% should the tax remain not pay for after 60 days.