Tax Estimation Form CP204 (Malaysia)

A Tax Estimation Form CP204 in Malaysia records the figures and particulars required for the tax filing it supports.

The CP204 instalment payment scheme was introduced by the Finance Act 2002 to replace the prior lump-sum tax payment system and to confirm more regular collection of corporate income tax. Under Section 107C(2) of the Income Tax Act 1967, CP204 must be filed not later than 30 days before the commencement of the basis period. For a company with a 31 December year-end, CP204 for YA 2025 must be filed by 1 December 2024. Newly incorporated companies and newly registered LLPs must file CP204 within 3 months of the commencement of their first basis period.

The estimated tax declared in CP204 must not be less than 85% of the preceding year's assessed tax under Section 107C(4) of the Income Tax Act 1967, failing which the shortfall (the difference between instalments paid and 85% of the preceding year's assessed tax) is subject to a 10% penalty under Section 107C(9). Companies and LLPs are permitted to revise their CP204 estimate twice: once in the 6th month (using Form CP204A) and once in the 9th month of the basis period, to align instalments with the updated tax projection.

Monthly CP204 instalments must be remitted to LHDN by the 10th of each month using the LHDN e-payment portal, FPX online banking, or authorised bank counters at Maybank, CIMB, Public Bank, or RHB Bank. Late payment of any monthly instalment attracts a 10% surcharge on the outstanding amount under Section 107C(9) of the Income Tax Act 1967. The total CP204 instalments paid during the year are subsequently set off against the tax payable reported on the annual Form C (companies) or Form PT (LLPs).

For companies and LLPs with a track record of under-estimating tax, LHDN may issue a Form CP204 Direction under Section 107C(7), prescribing a minimum estimate that the company is required to adopt. Failure to comply with a CP204 Direction is an offence under Section 120 of the Income Tax Act 1967.

The legal framework governing the Tax Estimation Form CP204 (Malaysia) in Malaysia draws on several key statutes and regulatory bodies. Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Parties executing a Tax Estimation Form CP204 (Malaysia) in Malaysia should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Income Tax Act 1967 (Act 53) sets the foundational requirements.

Form CP204 in Malaysia is required for every company and LLP before the start of each new year of assessment, and in specific situations during the year.

CP204 is required by a Sdn Bhd, Bhd, or PLT before the commencement of its annual accounting period — specifically, no later than 30 days before the basis period begins under Section 107C(2) of the Income Tax Act 1967. Every company with an active LHDN income tax reference number must file CP204 annually to establish its instalment obligations, even if it expects zero tax payable.

CP204 is needed when a newly incorporated company or newly registered LLP commences business in Malaysia. New entities must file CP204 within 3 months of the commencement of their first basis period. The initial CP204 estimate is typically based on projected first-year income from the business plan, since there is no prior year's assessed tax for comparison.

CP204 is needed when a company's trading performance has improved significantly from the prior year, requiring a voluntary upward revision of the tax estimate. A CP204A revision in the 6th month of the basis period allows the company to increase monthly instalments to avoid a large balance payable on the Form C due date, which would otherwise attract interest under Section 103 of the Income Tax Act 1967.

CP204 is required when a company has received a CP204 Direction from LHDN under Section 107C(7) prescribing a minimum tax estimate. In this case, the company must comply with the direction or seek a formal objection through the LHDN branch officer within the prescribed period.

CP204A is needed in the 9th month of the basis period when a company has won a major contract, completed a large asset sale, or received an exceptional dividend — any of which materially increases projected taxable income beyond the 6th-month estimate. Filing CP204A adjusts remaining instalments to match the revised projection and avoids the Section 107C(9) penalty.

A complete and compliant CP204 Tax Estimation filing for Malaysia must include the following essential elements.

Company / LLP Identification: The full legal name, LHDN income tax reference number (prefix 'C' for companies, 'PT' for LLPs), SSM registration number, and the year of assessment to which the estimate applies must be stated. Errors in the tax reference number cause misallocation of instalment payments and may result in LHDN issuing penalty notices.

Estimated Tax Payable: The estimated chargeable income and the resulting estimated tax payable for the upcoming year of assessment must be declared. The estimate should be based on the best available forecast of income and expenses, and must not be less than 85% of the preceding year's assessed tax under Section 107C(4) of the Income Tax Act 1967, unless a lower estimate can be justified by genuine business decline.

Instalment Schedule: The 12 monthly instalment amounts (each equal to estimated tax divided by 12) and the due dates for each instalment must be stated. Instalments are due on the 10th of each month. For a first year of assessment or where the basis period has fewer than 12 months, the number of instalments is reduced proportionately.

Basis Period Reference: The exact basis period (start and end dates of the accounting period) to which the CP204 relates must be stated so LHDN can allocate payments to the correct year of assessment. A mismatch between the CP204 basis period and the Form C basis period will cause reconciliation errors.

Revision Details (CP204A): If a revision is being filed in the 6th or 9th month, the form must state the revised estimated tax, the basis for the revision, the adjusted remaining instalment amounts, and the month of revision. CP204A cannot be filed outside the 6th or 9th month windows.

Payment Method: The elected payment method — LHDN e-payment portal (ByrHASiL), FPX, or authorised bank counter — should be noted so the payment team can comply with the instalment schedule.

Authorised Signatory: The CP204 must be signed by a director, compliance officer, or authorised tax agent registered with the Chartered Tax Institute of Malaysia (CTIM) or the Malaysian Institute of Accountants (MIA). The signatory confirms that the estimate is made in good faith based on available information.

Additional compliance elements for a Tax Estimation Form CP204 (Malaysia) used in Malaysia include: Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Forms-legal.com provides this template as a starting point for Malaysia-compliant documentation.