Under the self assessment system, every company is required to determine and submit in a prescribed form (Form CP204) an estimate of its tax payable for a year of assessment, 30 days before the beginning of the basis period.
New company must submit CP204 within 3 months once started business
However, when a company first commences operations (ie during the first period), the estimate of tax payable must be submitted to the IRB within 3 months from the date of commencement of its business and thereafter no later 30 days before the beginning of the basis period.
Coming year’s tax estimation cannot be less than 85% of previous one
With effect from YA 2006, the estimate of tax payable submitted for a particular year cannot be less than 85% of the revised estimate of tax payable for the immediate preceding year of assessment, of if no revised estimate is furnished, cannot be less than 85% of the estimate of tax payble for the immediate preceding year of assessment.
A company is still required to submit the CP204 within the stipulated deadline even if it expects its estimate of tax payable to be NIL.
SME do not need to submit CP204 within first 2 years of assessment
With effect from YA 2008, where a SME first commences operations in a year of assessment, the SME is not required to furnish an estimate of tax payable or make instalment payments for a period of 2 years beginning from the year of assessment in which the SME commences operations.
With effect from YA2011, where a company first commences operations in a year of assessment and the basis period for that year of assessment is less than 6 months, that company is not required to furnish an estimate of tax payable or make instalment payments for that year of assessment.
SME may still be penalised if no CP204 submitted, even though is not required
A SME which is exempted from furnishing an estimate of tax payable mentioned above is advised to submit the CP204 notifying IRB of its SME status without having to state the amount of estimate of tax payable for that particular year of assessment to avoid any penalty for under-estimation of tax or penalty for non-submission being wrongly imposed by IRB.