What is CP204? Understand the Basics

We guide Malaysian companies through the statutory estimate process so you can manage cash flow and compliance with confidence.

CP204 is the prescribed form for a company’s estimation of chargeable income and monthly installments under Malaysia’s Self-Assessment System. You submit this declaration to LHDN to report projected corporate income tax for the Year of Assessment.

Filing the form helps spread your tax liability across the year rather than creating a lump-sum burden at return time. CP204A lets you revise that estimate in designated windows, so adjustments stay supportable and timely.

We advise integrating estimate routines into your monthly close. That keeps forecasting practical, reduces surprises, and keeps your finance team ready for LHDN queries.

Key Takeaways

• CP204 provides a structured monthly payment plan for corporate tax.
• Submit prior to the basis period start; new businesses follow the three-month rule.
• CP204A allows corrections within prescribed windows to keep estimates accurate.
• Integrate estimation into budgeting to protect cash flow and financing headroom.
• We help you document methodology so estimates withstand LHDN review.

What is CP204 in Malaysia and why it matters

Form CP204 records a company’s annual tax forecast and arranges monthly instalments to ease cash management.

Under Malaysia’s Self-Assessment System, the prescribed statement sets your schedule of monthly payments and shows projected tax payable for the Year of Assessment.

Definition, scope, and role

We treat the form as the mechanism the Inland Revenue Board uses to collect your estimated corporate income and schedule instalments. Companies and similar entities must forecast and submit their estimate at the beginning of the basis period.

Difference from CP500

Form CP204 targets corporate forecasts and instalment plans. By contrast, CP500 applies to prepayments for non‑salaried streams such as rental and royalties and follows a different notice and payment pattern.

Linking your accounting forecasts to the tax estimate improves cashflow planning and reduces end‑of‑year liability surprises. We recommend documenting assumptions to support any future submission or review by the revenue board.

Who must submit Form CP204 and when it starts to apply

Submission timing determines whether your projected tax payments stay orderly or trigger penalties.

Form CP204 applies to companies, trust bodies, cooperatives and LLPs as set out under Section 107C of the Income Tax Act 1967. Existing entities must complete their submission 30 days before the start of the basis period for the relevant assessment year.

New companies that commence operations must furnish the form within three months of starting trade when the first basis period is six months or longer. Trust bodies, cooperatives and LLPs have been required to e‑file via MyTax since 2019.

• We help you determine the correct deadline and prepare a defensible estimate tied to actual trading start.
• Submit CP204 electronically to the Inland Revenue via MyTax to avoid processing delays.
• If operations change, consider a revision through CP204A to keep instalments aligned with projected income.

Plan at least 30 days ahead. That gives time to validate numbers, secure approvals and avoid late submission penalties.

what is cp204: basis period, year of assessment, and key deadlines

Deadlines for the tax estimate hinge on your company’s accounting basis and the factual commencement of trading.

Understanding basis period vs. financial year-end

The basis period reflects the accounting period used for tax. It may align with your financial year-end but can differ if you change accounting dates.

Deadline rules and new businesses

Existing companies must submit CP204 30 days before the basis period beginning. For example, a basis period of 01.01.2025–31.12.2025 requires submission in late November 2024.

New businesses must submit within three months from the factual commencement date, provided the first basis spans at least six months.

Determining commencement

Commencement occurs when you start trading and generate income. Renting premises, hiring staff, or buying equipment alone does not count.

We reconcile accounts, verify first sales invoices, and document the start so your form cp204 and tax estimate stand up to review. If needed, we help you submit cp204 on time to avoid penalties on tax payable.

How to estimate tax payable for CP204

Start with a practical profit projection to convert management figures into a defensible estimated tax payable for the assessment year.

Forecasting chargeable income and deductible expenses

We produce a provisional tax computation by forecasting revenue streams, removing non-taxable items and modelling deductible expenses in line with the Income Tax Act.

Scenario analysis for sales swings, cost inflation and one-off items helps keep the estimate realistic and supportable.

Applying tax rates, capital allowances, and adjustments

Capital allowances reduce chargeable income; we match claims to your fixed asset register and commissioning dates.

Apply the correct corporate rate based on SME status. For non-SMEs a flat 24% rate generally applies when calculating tax payable.

The 85% minimum estimate rule and carryover logic

Your current year estimate must be at least 85% of the prior year’s estimate or amended figure. If a CP204A raises the estimate above instalments paid, the balance is spread over remaining payments.

Where revised estimates are lower, later instalments may be terminated. We link accounting close to the tax estimate so revisions have a clear audit trail.

SME exemption and notifications to LHDN

Qualifying small companies may be exempt from furnishing an estimate for the first two year assessment periods. The exemption under Section 107C(4A) applies when statutory conditions are met. We advise early review to confirm eligibility and document supporting records.

Qualifying as an SME for first two YAs exemption

To qualify, the company must be incorporated and resident in Malaysia. Paid-up capital must not exceed RM2.5 million at the start of the basis period.

• Control tests: No related company in the group may have paid-up capital above RM2.5 million.
• Ownership limits: Foreign ownership of paid-up capital must not exceed 20%.
• Management and control: Evidence such as board meetings held in Malaysia helps prove residency.

Advisability of submitting a zero estimate to avoid penalties

Even when exempt, we recommend a timely submission of a zero estimate on the prescribed form. A recorded submission minimises the risk of automated penalty notices.

Where a notice or penalty arises despite qualifying status, we prepare a waiver request to the local LHDN branch and align corporate records—share capital, minutes, and group structure—to support the claim.

We also monitor thresholds as your business grows and calendar critical months so you can submit cp204 or file a CP204A if circumstances change. This keeps your estimated tax payable defensible and compliant.

Submitting CP204 online: step-by-step and required details

A reliable online submission process starts with verified MyTax access and clear internal approvals.

Login can be performed by a company director via the MyTax portal or by an appointed tax agent. Trust bodies, cooperatives, and LLPs must e‑file since 2019.

MyTax/e‑Filing access, roles, and authentication

We guide you to set up MyTax access, verify the director profile, and assign preparer and approver roles well before the filing window.

Ensure director authorization or a signed mandate for your agent to avoid last‑minute access problems.

Information to prepare: basis period, estimate, schedule of installments

Prepare these data points: basis period dates, commencement date if new, estimated chargeable income, tax adjustments, and the proposed installment schedule.

• Confirm the correct Year of Assessment and submission date to meet statutory timelines.
• Validate company profile, tax reference number, and banking details for seamless payments and reconciliation.
• Draft internally, obtain director approval, then submit electronically and save the acknowledgment.

We set calendar reminders for installment due dates and integrate outputs to your accounting systems so you can track the schedule and payments. When ready, submit cp204 through MyTax with our checklist in hand.

Revising your estimate with CP204A

We schedule formal estimate reviews to keep your instalment plan aligned with trading performance.

Timing: Amendments are accepted during the 6th and 9th months of the basis period via the prescribed form CP204A. These windows let you capture mid‑year deviations and recalibrate the tax estimate.

How adjustments change instalment payments

If the revised estimated tax exceeds instalments already paid, we compute the shortfall and spread the balance evenly across the remaining instalment payments.

When the revised amount is lower, later instalments can be terminated to preserve cash flow while staying compliant.

Off‑cycle revisions and governance

Off‑cycle changes are possible by lodging an appeal to LHDN; approval is discretionary. We prepare a substantiated appeal, supporting financials, and board approvals to improve chances of acceptance.

• We run variance analysis to justify the tax estimate.
• We document assumptions in a CP204A memo to support later reviews.
• We update payment calendars and treasury plans once MyTax submission is complete.

“Timely revisions reduce risk and protect liquidity.”

Payment schedule and methods for CP204 installments

We set a clear payment calendar so your company meets instalment dates and protects cash flow. Monthly instalment payments are generally due no later than the 15th of each month.

Monthly instalment due dates and managing cash flow

We align the instalment schedule with your basis period and Year of Assessment. This gives treasury time to plan bank approvals and funds across entities.

If a revision changes your payable, we update remaining instalment amounts and notify finance to adjust payment runs. We maintain ByrHASiL acknowledgments for every posted payment.

FPX via ByrHASiL, card options, and discontinued cheque payments

• Preferred method: FPX via the ByrHASiL portal. We confirm your bank’s enrollment and internal sign-offs ahead of the run.
• Credit card payments on ByrHASiL are temporarily unavailable since 1 October 2022; cards remain accepted at PPTH Kuala Lumpur, Kuching and Kota Kinabalu with a 0.8% fee.
• Cheque payments by post or courier were discontinued from 1 January 2021; e‑payment is now standard to avoid rejections by the Inland Revenue.
• Our treasury checklist ensures correct payment references (tax reference number, instalment number and period) for allocation by the revenue board.

“Meeting monthly dates and using electronic channels reduces reconciliation risk and penalty exposure.”

Penalties, underestimation risks, and compliance best practices

Penalties for late filing and underestimation can materially affect cash flow. We focus on controls that limit exposure and keep your tax liability predictable.

Late submission and late payment penalties

Late submission of the form is an offence under Section 120(1)(f) and may attract fines from RM200 to RM20,000.

Missing an instalment due date adds a 10% surcharge on unpaid amounts under Section 107C(9). That quickly raises the tax payable and harms cash flow.

Underestimation thresholds and the 10% surcharge

If actual tax payable exceeds your estimate by more than 30%, Section 107C(10) applies a 10% penalty to the under‑estimated difference.

To limit this risk, keep monthly variance checks and consider a timely CP204A revision in the 6th and 9th months of the basis period.

Practical tips to avoid traps and document your basis

• Maintain strong accounting workpapers linking forecasts to assumptions and income.
• Document capital allowance schedules and non‑recurring items that affect the estimated tax payable.
• Set approval matrices and payment cutoffs to prevent missed tax payments.
• Align board minutes to support the tax estimate and any CP204 form revisions.

“Proactive governance and clear documentation reduce penalty risk and strengthen your defense in any assessment.”

Conclusion

CP204 form anchors compliance and cash planning for companies. A defendable projection protects your business from surcharges and keeps instalments manageable.

Submit on time, set the correct basis period, and review the estimate monthly. Use CP204A when performance diverges to keep instalments aligned with reality.

SMEs that qualify for the two‑year exemption should still notify LHDN with a zero estimate to avoid automated penalties. We integrate these tasks into your finance calendar so forecasting, approvals, and payments run smoothly.

We provide end‑to‑end support—from determining commencement to preparing form cp204 and scheduling payments. Engage us to benchmark your estimated tax process and strengthen governance for the year ahead.