Wednesday 13 July 2011

Submission of Form CP204 for small and medium enterprises (SMEs)

The Inland Revenue Board (IRB) has issued the above notice on 9 June 2011. Pursuant to Section 107C(4A) of the Income Tax Act 1967 (ITA), a Malaysian resident company need not submit the estimate of tax payable in a prescribed form for the first two years of assessment in which it first commences operations, provided it is an SME (i.e. the paid up ordinary share capital of the company is not more than RM2.5 million at the beginning of the two basis periods and that it does not control or is controlled by a related company which has a paid up ordinary share capital of more than RM2.5 million at the beginning of the basis period for a year of assessment).

However, the IRB is unable to identify an SME when:

a. imposing a penalty on underestimate pursuant to Section 107C(10) ITA 1967.

b. issuing notification of legal proceedings for offences committed under Section 120(1)(f) ITA 1967.

As such, the IRB has amended the Form CP204 to allow a taxpayer to inform the IRB of its ‘SME’ status without furnishing the estimate of tax payable. A similar amendment is made in the e-Filing Form CP204.

The amendment is effective from 3 March 2011. However, the SME that does not submit a Form CP204 in the first year, is requested to submit a Form CP204 in the second year if it is still an SME. Where a penalty under Section 107C(10) is imposed or notification of legal proceedings under Section 120(1)(f) is issued to an SME, please refer to the IRB Branch where the Company income tax returns are maintained, for waiver of the penalty.

Members may view the letter at the following link IRB Letter - Submission of Form CP204 for Small and Medium Enterprises (SMEs) (090611)

8 comments:

  1. Hi and thank you for the most helpful information above. May I please know :

    1) How should Form CP204 be filled up if the business has been defunct for many years?

    2) Is Form CP204 specifically for SMEs?

    Thanks again.

    ReplyDelete
  2. 1. You need to write to IRB to inform about this.

    2. All the companies are required to fill in CP 204, however SME need not file in for the first two years in which it commences operations.

    ReplyDelete
    Replies
    1. WANT TO CONFIRM, WHETHER IS FIRST 2 YEARS OF IT BIZ COMMENCE DATE OR INCORPORATION DATE?

      Delete
  3. Thank you. Is there a due date for the submission of Form CP204?

    ReplyDelete
  4. I understand that for new company commencement business. CP 204 still required to submit within 3 months from the date of commencement but whether any estimated amount needed to fill up the column of the said Form.

    ReplyDelete

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