CP204 TAX INSTALMENTS FOR COMPANIES NEW UPDATES
π’ Update: CP204 Instalment Rules Have Changed
Reference: Malaysia Budget 2026 / LHDN / IRBM
The Government has introduced changes to the CP204 instalment payment timeline to better align corporate tax payments within the same Year of Assessment (YA).
This initiative aims to improve tax administration efficiency, reduce cross-year instalment overlap, and enhance companies’ cash flow planning.
π Key Highlights of the CP204 Update
1. Current Practice
• CP204 instalments currently begin in Month 2 of the basis period
• The final instalment may extend into Month 1 of the following YA
• This creates overlap between Years of Assessment
2. Transitional Rule for YA 2027
• Instalments will continue to start in Month 2
• Payment schedule will consist of 11 instalments only
• All instalment payments must be completed within the same YA
• No instalment will spill over into the next YA
Example:
Financial year starts: 1 January 2027
• Month 1 → January 2027
• Month 2 → February 2027
β‘ Therefore, the first CP204 instalment payment will commence in February 2027
3. New Rule Effective YA 2028
• CP204 instalments will start from Month 1 of the basis period
• Companies will return to a 12-month instalment cycle
• All instalments must be completed within the same YA
• No cross-year instalment payments will be allowed
π‘ Why This Matters
The revised timeline helps companies:
• Better align tax payments with their financial year
• Improve cash flow planning
• Reduce reconciliation issues between financial years
• Ensure smoother tax compliance
β οΈ What Companies Should Do
Companies are encouraged to:
• Review their CP204 tax planning arrangements
• Monitor instalment schedules carefully
• Prepare cash flow projections early
• Ensure timely tax instalment payments
πΌ Need Professional Assistance?
As licensed Tax Agents, Audit Firm, and Accounting Firm in Johor Bahru, we assist with:
• CP204 tax instalment planning
• Estimated tax payable calculations
• CP204A revisions
• Corporate tax compliance advisory
• Cash flow and tax planning support
π Contact us today to ensure your company remains compliant with the latest CP204 instalment requirements and tax regulations.
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