What is CP204 and why does my company have to pay tax in instalments?
CP204 is the estimate of the tax a company expects to owe for the year, submitted before the year starts. The estimated tax is paid in equal monthly instalments, due on the 15th of each month from the second month, instead of one lump sum after Form C.
Malaysian companies pay income tax on a pay-as-you-go basis, using an estimate called CP204 under s.107C of the Income Tax Act.
How it works:
- The estimate is due no later than 30 days before the basis period starts (normally the financial year).
- The estimated tax is paid in equal monthly instalments, starting from the second month of the basis period. LHDN's worked examples show instalments falling due on the 15th of each month.
- When you file Form C, the final tax is compared with instalments paid. Any shortfall is due by the Form C deadline; any excess is refunded or offset.
Floor on the estimate: from the second year of assessment onward, the estimate must be at least 85% of the previous year's revised estimate (or original estimate if no revision was made), under s.107C(3).
Why it matters: the estimate drives monthly cash outflow and the penalties described in the next answers. Falling profits justify a downward revision. Rising profits call for an upward revision to avoid a penalty.
New companies have special treatment, covered in the next answer.
Legal basis
- Income Tax Act 1967, s.107C
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
- What is the corporate tax rate for a small company in Malaysia?A Malaysian resident company normally pays 24% income tax. A company that meets the SME conditions pays 15% on the first RM150,000 of chargeable income, 17% on the next RM450,000 (up to RM600,000), and 24% on anything above that.
- What conditions must my company meet to get the SME tax rates in Malaysia?To use the lower 15%/17% rates, the company must be resident, have ordinary paid-up capital of RM2.5 million or less, and gross business income of RM50 million or less. It must also pass the related-company test and, from YA 2024, a foreign-ownership test.
- Does a dormant company with no income still have to file a tax return in Malaysia?Yes. LHDN says companies that are dormant or have not started business must still register a tax file and file returns. A nil return tells LHDN there is no taxable income, and failing to file can be an offence even when no tax is due.
- What is the Year of Assessment and how does it relate to my financial year?The Year of Assessment (YA) is the calendar year in which your company's accounting year (the basis period) ends. A company with a financial year ending 30 June 2025 reports that income in YA 2025.
- How do I file Form C through MyTax e-Filing?Form C is filed online through LHDN's MyTax portal using the company's tax number and login. You complete the company return, attach no paper, submit, and keep the confirmation. Manual paper submission is no longer accepted for companies.