Latest update on CP 500

Overview of CP 500:

Every February or March of the year, the taxpayer shall receive the CP500 from LHDNM through post or email notification.

CP500 is a tax instalment scheme issued by LHDNM to individual taxpayer who carrying business income. For example, sole-proprietor, self-employed, partnership, person who received rental income or royalties.

Key takeaway:

You will understand:

a) What is CP500?

b) What is the due date for CP500?

c) What is the penalty for late payment on CP500?

d) Can taxpayer do revision for CP500?

e) Any penalty for revising CP500?

Summary of Learning

a) What is CP500?

This is the tax instalment issued by LHDNM for individual taxpayer who has income other than employment income such as business income, rental income and royalties.

If you not yet receive the letter by end of March, you may visit the tax office or contact LHDNM for more details.

However, taxpayer may not receive the CP500 if the taxpayer is making losses in last two years or just commenced the business.

b) What is the due date for CP500?

The tax estimate has to be paid bi-monthly in 6 instalments and the payment for each instalment should be made within 30 days from the date of payable (March, May, July, September, November and January).

c) What is the penalty for late payment?

If the taxpayer fail to make the tax instalment on time, LHDNM will impose a 10% penalty on the outstanding balance. The penalty is to be self-assessed and paid to the LHDNM.

d) Can taxpayer do revision for CP500?

Taxpayer is allowed to revise the CP500 by submitting Form CP502 to respective LHDNM Branch if they have any valid reason.

However, the revision must be submitted on or before 30 June of current year of assessment. LHDNM will issue the CP503X once they have approved for the revision.

e) Any penalty imposed for the revision?

If the revised tax payable (CP502) is 30% lower than actual tax payable, the difference will subject to a 10% penalty.

[(Actual tax payable – Estimated tax payable) – (30% x Actual tax payable)] x 10%

Sources:

CP502 Explanation Notes:

http://phl.hasil.gov.my/pdf/pdfam/CP502_NOTA_PENERANGAN_2.pdf

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