Tax Instalment Application (Malaysia)
[Application Date]
The Director
[LHDN Branch]
RE: APPLICATION FOR TAX INSTALMENT ARRANGEMENT (SKIM ANSURAN SUKARELA) — [Taxpayer Name] (LHDN Tax Ref: [LHDN Tax Ref]) — [Year(s) of Assessment]
We, [Taxpayer Name] (NRIC/SSM No.: [NRIC / SSM]; LHDN Income Tax Reference: [LHDN Tax Ref]), of [Taxpayer Address], hereby apply to the Honourable Director for a payment arrangement under LHDN's Skim Ansuran Sukarela (Voluntary Instalment Scheme) in accordance with the powers vested in the Director General of Inland Revenue under Section 103 of the Income Tax Act 1967 (Act 53), to settle the outstanding assessed income tax in monthly instalments as proposed below.
PART A — OUTSTANDING TAX DETAILS
Year(s) of Assessment: [Year(s) of Assessment]
Notice of Assessment Reference (Form J): [Form J Reference]
Total Outstanding Tax (RM): [Total Tax Outstanding]
Penalty / Surcharge Component (RM): [Penalty Amount]
Original Payment Due Date: [Original Due Date]
PART B — PROPOSED INSTALMENT PLAN
Proposed Number of Monthly Instalments: [Number of Instalments]
Proposed Monthly Instalment Amount (RM): [Monthly Amount]
Proposed First Instalment Date: [First Instalment Date]
PART C — REASON FOR INSTALMENT REQUEST
[Reason for Difficulty]
Existing Financial Commitments: [Existing Commitments]
PART D — COMPLIANCE UNDERTAKING
The Applicant hereby undertakes to: (1) make all monthly instalment payments on the agreed dates without default; (2) file all income tax returns for current and future years of assessment on time; (3) pay all current-year CP204 instalment estimates and other current tax obligations as they fall due throughout the arrangement period; and (4) notify LHDN immediately if the Applicant's financial position changes materially.
The Applicant understands that any default in the instalment schedule or failure to comply with current tax obligations will entitle LHDN to revoke this arrangement and demand immediate payment of the entire outstanding balance, and that LHDN may proceed with enforcement action under Section 104 of the Income Tax Act 1967 (Act 53) upon such revocation.
We respectfully request the Honourable Director to give favourable consideration to this application and to approve the proposed instalment arrangement. We remain available to attend a meeting at the LHDN branch to discuss this application further or to provide additional financial documentation as required.
Yours faithfully,
Signature: ____________________________
Name: [Signatory Name]
For and on behalf of [Taxpayer Name]
Date: [Application Date]
Company Stamp: ____________________________
Contact: [Contact Details]
Taxpayer / Authorised Representative
________________
Signature
What Is a Tax Instalment Application (Malaysia)?
A Tax Instalment Application in Malaysia sets out the particulars an applicant must provide to obtain the approval concerned.
Section 103(1) of the Income Tax Act 1967 requires all assessed income tax to be paid by the due date stated in the Notice of Assessment (Form J). When a taxpayer is unable to make the lump-sum payment by the due date — due to genuine cash flow difficulties, business downturn, or exceptional circumstances — the taxpayer may apply to the LHDN Director General or the relevant LHDN branch for a payment arrangement. LHDN has published guidelines on the Skim Ansuran through the MyTax portal, and applications are typically submitted to the Taxpayer Compliance and Collection unit at the relevant LHDN processing branch.
An approved LHDN payment arrangement typically specifies: the total outstanding tax amount; the number of monthly instalments (usually 6 to 24 months, depending on the amount and the taxpayer's financial position); the monthly instalment amount; the first instalment due date; and the condition that all future tax obligations must be complied with on time throughout the arrangement period. LHDN reserves the right to revoke the payment arrangement and demand immediate payment of the entire outstanding balance if the taxpayer defaults on any instalment, fails to file current returns, or creates new tax liabilities.
LHDN's Skim Ansuran is distinct from the CP204 corporate tax instalment scheme (Section 107C) and the CP500 individual tax instalment scheme (Section 107B), which are advance payment mechanisms for current-year tax. The Skim Ansuran addresses arrears — tax that has already been assessed and is overdue. LHDN charges interest on outstanding balances under Section 103 at the rate prescribed from time to time, and penalties under Section 103(3) of 10% on outstanding balances remain applicable unless waived by LHDN as part of the arrangement.
For corporate taxpayers with large outstanding assessments — particularly those arising from transfer pricing adjustments or Section 140 anti-avoidance assessments — LHDN may require security (such as a bank guarantee or property charge) as a condition for approving the instalment arrangement. The Department of Insolvency (Jabatan Insolvensi Malaysia) guidelines may also be relevant where the taxpayer is in a formal debt restructuring process under the Companies Act 2016.
When Do You Need a Tax Instalment Application (Malaysia)?
A Tax Instalment Application to LHDN is needed when a taxpayer cannot pay outstanding income tax in a lump sum and requires a structured payment plan.
A Tax Instalment Application is required when a company receives a Notice of Assessment (Form J) following an LHDN audit with a substantial additional tax liability, and the company's cash flow does not permit immediate lump-sum payment. The application allows the company to continue operations while settling the arrears in manageable monthly payments.
A Tax Instalment Application is needed when an individual or sole proprietor falls behind on income tax payments — for example, due to business losses, medical expenses, or economic downturns — and their outstanding tax, penalties, and surcharges have accumulated. LHDN's Skim Ansuran provides a structured route to regularise the position.
A Tax Instalment Application is required when a company is contesting a large LHDN assessment through a Form Q appeal to the Special Commissioners but must pay the disputed tax pending the appeal under Section 103(1) of the Income Tax Act 1967. An instalment arrangement allows the company to comply with the payment obligation without causing a cash crisis.
A Tax Instalment Application is needed when a company emerges from a temporary period of financial difficulty — for example, after a major client insolvency or a supply chain disruption — and needs to settle accumulated arrears over 12 to 24 months while current obligations are met.
A Tax Instalment Application is appropriate when LHDN has issued a Section 104 certificate permitting recovery of outstanding tax as a civil debt and the taxpayer wishes to prevent enforcement action (garnishee proceedings or asset seizure) by proposing a formal instalment plan to LHDN before the matter escalates to court.
What to Include in Your Tax Instalment Application (Malaysia)
A complete Tax Instalment Application to LHDN Malaysia must contain the following essential elements.
Taxpayer Identification: The full legal name, NRIC or SSM registration number, and LHDN income tax reference number of the applicant must be stated. For companies, the LHDN company tax reference (prefix 'C') and the name of the authorised director making the application must be provided.
Outstanding Tax Details: The total outstanding tax amount, broken down by year of assessment, the Form J reference, the penalty or surcharge component (if applicable), and the original payment due date must be listed. This allows LHDN to verify the outstanding balance from its internal records before approving the arrangement.
Proposed Instalment Plan: The proposed number of monthly instalments, monthly instalment amount, and proposed start date must be stated. Applicants should propose a realistic plan they can sustain — proposing unrealistically low monthly amounts will likely result in LHDN requiring a counter-proposal. Most LHDN instalment arrangements run for 6 to 24 months.
Financial Position Statement: A brief summary of the applicant's current financial position — including current income or revenue, monthly operating expenses, existing financial commitments (bank loans, LHDN CP204 instalments, EPF obligations), and the reason why lump-sum payment is not possible — must be provided. Supporting financial statements or management accounts may be required by LHDN.
Compliance Undertaking: The applicant must undertake to maintain compliance with all current tax obligations — filing returns on time and paying current-year CP204 instalments — throughout the instalment arrangement period. LHDN will not approve or will revoke an arrangement if the applicant is in arrears with current obligations.
Contact Information: A contact person, phone number, and email address must be provided so LHDN can reach the applicant to discuss the application or communicate approval/rejection.
Signature: The application must be signed by the taxpayer, a director (for companies), or an authorised tax agent registered with CTIM or MIA.
Additional compliance elements for a Tax Instalment Application (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.
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Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Tax Instalment Application (Malaysia) (Malaysia) [Legal document template]. Forms Legal. https://forms-legal.com/malaysia/government/tax-forms/tax-installment-application-malaysia
"Tax Instalment Application (Malaysia) (Malaysia)." Forms Legal, 2026, https://forms-legal.com/malaysia/government/tax-forms/tax-installment-application-malaysia.
@misc{formslegal-tax-installment-application-malaysia,
author = {{Forms Legal}},
title = {Tax Instalment Application (Malaysia) (Malaysia)},
year = {2026},
howpublished = {\url{https://forms-legal.com/malaysia/government/tax-forms/tax-installment-application-malaysia}},
note = {Free legal document template. Based on Income Tax Act 1967 (Act 53)}
}Frequently Asked Questions
Yes. LHDN in Malaysia offers the Skim Ansuran Sukarela (Voluntary Instalment Scheme, VIS) under the powers granted by Section 103 of the Income Tax Act 1967 (Act 53), allowing taxpayers with outstanding assessed income tax to settle the arrears in monthly instalments. To apply, the taxpayer must submit a formal written application to the LHDN branch handling their tax file, proposing a specific instalment plan including the number of months, monthly amount, and start date. LHDN will review the application based on the taxpayer's financial position and compliance history and may approve, modify, or reject the proposal. Approval is at LHDN's discretion — there is no statutory right to an instalment arrangement. Once approved, the taxpayer must strictly comply with the agreed schedule; any default may result in LHDN revoking the arrangement and demanding immediate payment of the entire outstanding balance, potentially initiating enforcement action under Section 104 of the Income Tax Act 1967.
Missing a payment under an approved LHDN Skim Ansuran (instalment arrangement) in Malaysia typically triggers a breach of the arrangement. Under the standard terms of LHDN instalment approvals, a single missed payment entitles LHDN to revoke the arrangement and demand immediate payment of the entire remaining outstanding balance, plus any additional 10% late payment penalty under Section 103(3) of the Income Tax Act 1967 (Act 53) on the unpaid amounts. LHDN may then issue a Section 104 certificate and proceed with recovery action — including garnishing bank accounts under Section 106 (notice to financial institutions to remit taxpayer funds to LHDN), seizing and selling assets, or taking legal action. Taxpayers who anticipate difficulty making a scheduled payment should contact their LHDN case officer before the due date to request a deferment or revision of the instalment schedule. Proactive communication with LHDN generally produces better outcomes than defaulting without notice.
LHDN may waive or reduce penalties under Section 124 of the Income Tax Act 1967 (Act 53) as part of the instalment arrangement negotiations, particularly under LHDN's periodic voluntary disclosure programmes (VDP — Voluntary Disclosure Programme) or general amnesty initiatives. However, penalty waiver is not automatic when applying for an instalment arrangement through the standard Skim Ansuran Sukarela. Standard 10% late payment penalties under Section 103(3) remain applicable on the outstanding balance unless LHDN specifically agrees to waive them as part of the instalment approval. In practice, LHDN officers have administrative discretion to recommend penalty waivers for cooperative taxpayers who proactively approach LHDN, make partial payments, and demonstrate genuine financial hardship. Tax practitioners recommend engaging the LHDN Hasil Care Line (03-8911 1000) or attending the relevant LHDN branch in person to discuss the instalment and penalty waiver simultaneously, as LHDN is more likely to offer concessions in face-to-face negotiation than through written applications alone.
LHDN instalment arrangements in Malaysia under the Skim Ansuran Sukarela typically run for 6 to 24 months, depending on the outstanding amount and the taxpayer's financial position. LHDN generally requires arrangements to be as short as the taxpayer's cash flow can sustain — LHDN's collection policy aims to minimise the period that assessed taxes remain outstanding. For very large assessments — for example, transfer pricing adjustments in the tens of millions of Ringgit — LHDN may consider arrangements beyond 24 months if supported by audited financial evidence of genuine cash flow constraints. LHDN may require security (a bank guarantee, first charge over property, or directors' personal guarantee) for large or extended arrangements. Where a company is undergoing formal financial restructuring under Part IIIA of the Companies Act 2016 (schemes of arrangement), LHDN participates as a creditor in the restructuring process and may accept the payment terms proposed in the approved scheme, which may extend beyond 24 months.
LHDN's Skim Ansuran Sukarela (VIS) application can be initiated online through the MyTax portal (mytax.hasil.gov.my) under the 'Pengurusan Hasil' (Revenue Management) module, which allows taxpayers to view outstanding balances, request payment arrangements, and track instalment schedules. However, for complex cases — large outstanding amounts, penalty waiver requests, or assessments under appeal — LHDN typically requires the taxpayer or their tax agent to attend the relevant LHDN processing branch in person to negotiate and formalise the arrangement. Simpler instalment requests for individuals with standard employment income arrears can generally be completed online. Tax agents registered with CTIM or MIA may submit instalment applications on behalf of their clients using the tax agent portal on MyTax. The LHDN Hasil Care Line (03-8911 1000) can provide guidance on the most efficient submission route for a specific taxpayer's circumstances.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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