What is the penalty for paying company income tax late?
Company tax unpaid after its due date is increased by 10% under s.103(3). The earlier extra 5% step has been deleted from the Act. A company's balance is due on the last day of the seventh month after year end. A CP204 instalment not paid by its due date carries 10% under s.107C(9).
Late payment has its own penalties, separate from late filing.
LHDN's table (Offences, Fines and Penalties):
- Tax paid after the due date under s.103(3): a 10% increase in the tax payable. The table's examples are framed around individuals' due dates of 30 April and 30 June.
- For individuals, instalments paid more than 30 days late: 10% (s.107B(3)). For companies, an instalment not paid by its due date carries 10% of the unpaid amount (s.107C(9)).
For companies: the balance of tax is due by the last day of the seventh month after year end, the same day as Form C. The same s.103(3) charge applies: 10% of the unpaid tax. The Act now shows only that single 10% charge; the subsections that once added a further step are marked deleted. Tax assessed under ss.90(3), 91 or 92 is due on service of the notice and attracts 10% if unpaid after 30 days (s.103(5)). Where LHDN agrees to instalments and one is missed, the whole outstanding balance becomes due and is increased by 10% (s.103(7)). LHDN can remit these amounts for good cause (s.103(9)).
Other consequences: LHDN can recover unpaid tax and penalties as a debt, issue notices to banks or debtors, and restrict travel in serious cases.
If you cannot pay: LHDN has an application to pay a balance of tax by instalments. Apply before the due date.
Late payment is separate from the s.112 filing offence.
Legal basis
- Income Tax Act 1967, s.103(3), (5), (7) and (12)
- Income Tax Act 1967, s.107C(9)
Sources
Applies to YA 2026 · Last reviewed 29 October 2026
General information for business owners, not legal, tax or professional advice. Rules change, so check the sources or ask a licensed professional before you act.
Related questions
- When do I pay withholding tax to LHDN and what is the penalty for paying late?Withholding tax must reach LHDN within one month after you pay or credit the non-resident, even if you did not deduct it. Late payment adds 10% of the unpaid amount under s.107A(2), s.109(2) or s.109B(2), depending on the payment, and the related expense can be disallowed.
- What happens if my company files Form C late?Not filing a return on time is an offence under s.112(1): a fine of RM200 to RM20,000, imprisonment of up to six months, or both. In practice LHDN often offers to compound the offence for a lower amount, and late payment penalties may also apply.
- When is the Form C deadline for a Malaysian company?Form C must be submitted electronically within seven months after the company's financial year end. A company with a 31 December year end therefore files by 31 July of the following year. Any tax balance is also due by the same date.
- How and when can I revise my CP204 tax estimate (CP204A)?A company can revise its CP204 estimate in the 6th, 9th and 11th month of its basis period, in any or all of the three. The latest revision is the one used to test the 30% under-estimation penalty. The new instalment starts from the 5th or 6th, 8th or 9th, or 11th instalment respectively.
- What is the penalty if my CP204 estimate is too low?For companies the penalties sit in s.107C. If tax payable exceeds the latest estimate by more than 30% of the tax payable, 10% is charged on the part of the excess above that 30% (s.107C(10)). An instalment not paid by its due date carries 10% of the unpaid amount (s.107C(9)). With no estimate at all, 10% is added to the tax payable.