Updated Information On Company’s Payment Of Income Tax Via Monetary Transfer From Oversea (Part 1)



Tax Payment

Instalment Payment CP204


Companies, limited liability partnerships, trust bodies and cooperative societies which have not commenced operation need not furnish Form CP204.


For existing companies, the estimated tax payable has to be paid in equal monthly instalments beginning from the second month of the basis period for a year of assessment.

Example:

For new companies, instalment payments must commence in the 6th month of the basis period for the year of assessment i.e. payable in the 6th month after the company commences operations. A company is required to pay the instalment of the estimated tax by the 15th day of each month.


Balance of Tax Payment

When a company has determined its actual tax payable, balance of tax which is the actual tax payable after deducting total instalments on the tax estimate, has to be paid within 7 months from the close of the accounting period. Please use the CP207 Form payment slip which is provided together with the C Form to make payment.


Penalty Under Instalment Scheme

If a company fails to pay the monthly instalment on the tax estimate by the stipulated date, a late payment penalty of 10% will be imposed on the balance of tax instalment not paid for the month.


If the difference between the actual tax payable and the estimated tax payable (if the revised estimate is not furnished) is more than 30 % of the actual tax payable, a 10% increase in tax will be imposed on that difference.

The formula for calculating the amount of tax to be increased is as follows:

Amount of tax to be increased = {(AT-ET) - (30% x AT)} x 10% where: AT: actual tax payable ET: revised estimated tax payable or estimated tax payable (if no revised estimate is furnished)

Penalty for Late Payment

If the balance of tax payable is not paid by the due date, a penalty of 10% will be imposed on the outstanding amount. If the tax payable and penalty is still outstanding within 60 days from the due date, an additional penalty of 5% will be imposed on the tax and penalty outstanding.


Appeal on Penalty

An appeal in writing within 30 days from the statement of account can be submitted to the relevant branch (Collections Unit), if the company does not agree with the late payment penalty imposed.

The company has to pay its tax liability first irrespective of any appeal.

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