It is important to know what will happen to a company if a company fails to submit Form CP204 within the stipulated period, Form CP204 submitted but fails to pay the tax instalment or under-estimated tax payable for a particular year of assessment.

Each offence may result in penalty ranging from RM200 to RM2,000 being charged by LHDN.

The following are the penalty provisions for such failures in complying with the income tax requirements for CP204: 

Failure to Furnish Estimate of Tax Payable

Under Section 120(1)(f) of the Income Tax Act 1967 (ITA), any company which, without reasonable excuse fails to submit the estimate of tax payable for a year of assessment shall be guilty of an offence and upon conviction, be liable to a fine ranging from RM200 to RM2,000 or face imprisonment for a term not exceeding 6 months or both.

With effect from YA 2011, where no prosecution is instituted by the Director General and no direction is issued by the Director General under the Section 107C(8) of the ITA 1967; but there is a tax payable by that company for that year of assessment, such amount of tax payable will be subject to a penalty of 10%

Late Payment Penalty

Monthly payments should be remitted to the LHDN by the due dates, that is by the “10th” day of the following month. Failure to remit the instalments on a timely basis will result in an automatic penalty of 10% being imposed on the unpaid amount.

Difference Between The Estimate Submitted and Final Tax Payable

When the tax payable for a particular year of assessment exceeds the original or the revised estimate (if a revision is submitted) by an amount exceeding 30% of the tax payable, the difference will be subject to a penalty of 10%