FAQ on Revision of Tax Estimate in The 11th Month of The Basis Periods for YA 2021 and YA 2022 and Deferment of Payment under CP 204 and Notice of Instalment Payment (CP 500) for Micro, SME

FAQ on Revision of Tax Estimate in The 11th Month of The Basis Periods for YA 2021 and YA 2022 and Deferment of Payment under CP 204 and Notice of Instalment Payment (CP 500) for Micro, SME

To Our Valued Clients

The Inland Revenue Board ["IRB"] has issued the Frequently Asked Questions ["FAQ"] - Revision of Tax Estimate in The 11th Month of The Basis Periods for YA 2021 and YA 2022 and Deferment of Payment under CP 204 and Notice of Instalment Payment (CP 500) for Micro, Small and Medium Enterprises from 1st January 2022 to 30th June 2022 (Updated on 3rd December 2021) to provide clarification on these measures announced in the recent Budget 2022.

Salient points of the FAQ are as summarised below:-

i. Revision of Tax Estimate in The 11th Month of The Basis Periods for YA 2021 and YA 2022
 
● Taxpayers (companies, co-operative societies, limited liability partnerships and trust bodies) in all industries are eligible to apply for the 11th month revision of tax estimate for YA 2021 and YA 2022.
● Both upward and downward revisions of tax estimate are allowed.
● The amount of revised tax estimate submitted in the 11th month (if any) of the basis period will be taken into account in determining the difference between the tax assessed and the tax estimate or revised tax estimate (as the case may be) exceeding the 30% margin allowed that will be subject to penalty of 10% under Section 107C(10) of the Income Tax Act 1967.
● The amount of tax estimate to be submitted for YA 2022 and YA 2023 must not be less than 85% of the latest amount of tax estimate for the immediately preceding year of assessment. This statement seems to be inconsistent with the prevailing tax legislations and hence, further clarification from the IRB may be required.
● The due date for submitting the 11th month revision of tax estimate will be as follows:-
 
  Due date
- YA 2021 By 30th November 2021 (Extended until 10th December 2021)
- YA 2022 Last day of the 11th month of the basis period
● In the case where the 11th month of the basis period falls in the month of November 2022, the last day to submit the revision of tax estimate is 31st October 2022.
● No supporting document is required for the purpose of the submission of revised tax estimate in the 11th month of the basis period.
● No approval is required from the IRB on the application for the revision of tax estimate in the 11th month of the basis period and taxpayers can remit payment for tax instalments for the subsequent month(s) based on the revised tax estimate submitted.
ii. Deferment of Payment under CP 204 and Notice of Instalment Payment (CP 500) for Micro, Small and Medium Enterprises from 1st January 2022 to 30th June 2022
 
● The deferment of payment applies to the following payments that fall due during the period from 1st January 2022 to 30th June 2022 ["the deferment period"]:-
 
- tax estimate instalments under CP 204 for businesses with Micro, Small and Medium Enterprises ["MSME"] status; and
- instalment payment scheme under CP 500 for individuals with source(s) of income other than employment income
● The criteria for MSME status are as follows:-
 
- has paid-up capital of not exceeding RM2.5 million at the beginning of the basis period for a year of assessment; and
- has gross business income of not exceeding RM50 million for the basis period for that year of assessment.
● A Limited Liability Partnership is also eligible for the deferment of payment for which the criteria will be determined as follows:-
 
- has a total contribution of capital (whether in cash or in kind) of RM2.5 million or less at the beginning of the basis period for a year of assessment; and
- has gross business income of not exceeding RM50 million for the basis period for that year of assessment.
● The eligibility for deferment of tax instalment payments under CP 204 for taxpayers is determined based on the MSME status stated in the latest income tax return form ["ITRF"] submitted to the IRB.
● The deferred instalment payments under CP 204 / CP 500 are not required to be paid after the deferment period. Taxpayers are allowed to settle the balance of tax payable (if any) upon submission of the ITRF for the relevant year of assessment.
● No penalty on late payment will be imposed in respect of the deferred instalment payments under CP 204 and CP 500 during the deferment period.
● The deferment of instalment payments under CP 204 and CP 500 is granted automatically to all eligible taxpayers.
● Only taxpayers with MSME status determined based on the information provided in the latest ITRF that qualify for the deferment of payments under CP 204 will be notified by the IRB via their email address registered with the IRB.
● The taxpayers with MSME status who are eligible for the deferment but have not received any notification from the IRB are required to notify the IRB via email to penangguhancp204@hasil.gov.my for record purposes and to avoid the imposition of any late payment penalty.

For further information, kindly refer to the following:-

a. FAQ on Revision of Tax Estimate in The 11th Month of The Basis Periods for YA 2021 and YA 2022 and Deferment of Payment under CP 204 and Notice of Instalment Payment (CP 500) for Micro, Small and Medium Enterprises from 1st January 2022 to 30th June 2022 (Updated on 3rd December 2021); and
b. Our email of 23rd November 2021 on Highlights on Budget 2022 Proposals (Part 1) - Special Revision of Tax Estimate in 11th Month of the Basis Periods for YA 2021 and YA 2022.

 

Please do not hesitate to contact us if you need any clarification on the foregoing.