CP204 Estimated Tax: How It Works

By Axecta Management Services, Kuala Lumpur · Last verified: 29 October 2026

What CP204 is and who must submit

CP204 is the notification of tax estimate. Companies carrying on business that have chargeable income are generally required to submit it for each basis period. It sets the monthly instalments the company must pay. Some categories of companies are treated differently, so check LHDN’s list.

When the first submission is due

The deadline is tied to the start of the basis period, and new companies have their own timing rules for the first period. Look up the rule on LHDN’s site for your case and set a reminder well ahead.

How the estimate is set and how instalments work

LHDN has rules on a minimum estimate for companies that have been assessed before, often based on the previous year’s assessment. A company can submit a higher estimate; setting a lower one may need justification. Once accepted, the estimate is divided into equal monthly instalments through the basis period.

Revising the estimate

A company may revise its estimate in specified months of the basis period. Revision matters when profit is moving materially, for example after a lost contract, a large new order or a one-off gain. Use management accounts to decide. Missing the revision window leaves you with a stale estimate and either an overpayment or a risk of penalty.

Common penalties and how they arise

• Late submission of the estimate.
• Under-estimation beyond the permitted margin, compared with final tax.
• Late payment of instalments.

LHDN states the rules and rates; check them before relying on a figure.

Managing CP204 as part of cash flow

• Set the estimate using a profit forecast, not last year’s figure only.
• Review it mid-year against management accounts.
• Revise when the forecast shifts.
• Pay instalments on time from a reserved account.
• Coordinate with your Form C and payment planning.

How Axecta helps

Axecta’s tax team prepares the estimate from your accounts, submits it, tracks instalments and revises it when the numbers change. It’s a small recurring task that is easy to forget and expensive to get wrong.

What LHDN’s CP204 page states

LHDN’s CP204 page (last updated 26 June 2026) gives the rules in detail:

• Who: companies, LLPs, trusts and cooperatives submit Form CP204 annually and pay estimated tax by the prescribed schedule. E-filing applies to companies from YA 2018.
• Existing companies: submit no later than 30 days before the start of the basis period (section 107C(2)).
• New companies: within 3 months from the date operations begin, where the first basis period is at least 6 months (section 107C(4)(a)). The 30-day rule applies from the second year of assessment.
• Revisions: via CP204A, in the 6th, 9th or 11th month of the basis period, or all three.
• Instalments: equal monthly instalments, from the 2nd month for existing companies and the 6th for new companies, each due on the 15th.
• Minimum estimate: not less than 85% of the revised estimate for the preceding year, or of the original estimate if there was no revision (section 107C(3)).
• If you do not file: the Director General issues a Notice of Instalment Payment (CP205) under section 107C(8), and prosecution may be taken. On conviction the page states a fine of not less than RM200 and not more than RM20,000, or imprisonment for up to 6 months, or both (section 120(1)(f)).

The page does not discuss late-payment surcharges, so check with LHDN for the current position on those.

How revisions interact with instalments

LHDN’s page explains that revised instalments take effect from the 5th or 6th instalment if you revise in the 6th month, the 8th or 9th if you revise in the 9th month, and the 11th if you revise in the 11th month. That is why a mid-year review in month 5 or 6 is useful: it lets you use the earliest window.

A worked example (illustrative)

A company’s previous-year estimate was RM100,000. The minimum new estimate under section 107C(3) would be 85% of that, so not less than RM85,000. If the company expects a loss of a major contract and profit to fall, it can set the estimate at that minimum or revise later using CP204A. If it expects profit to rise, it should set a higher estimate to avoid a large balance later.

Checklist

• Diary the submission date 30 days before the basis period starts.
• Diary revision windows (months 6, 9, 11).
• Pay by the 15th each month.
• Review profit forecasts quarterly.

Frequently asked questions