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SELF ASSESSMENT SYSTEM – TAX ESTIMATE

A) NEW COMPANY

We wish to bring to your company’s attention that the Inland Revenue Board (IRB) is implementing a Self Assessment System for companies effective year 2001. This was announced in the 1999 Budget. A Self Assessment System requires taxpayers to determine the taxable income and comply strictly to the policy statements and guidelines issued by the IRB from time to time based on tax laws. As such, all companies are required to adhere to IRB’s new rulings as follows :-

1) Filing of Tax Return – 7 months from the Company’s Financial Year-End.

2) Payment of Taxes –

An estimate of tax payable has to be forwarded within three(3) months from the date of commencement of business operations. The estimated tax payable has to be settled in equal monthly installments determined according to the number of months in the basis period. Each installment shall be paid by the due date beginning from the sixth(6) month of the basis period for the Year of Assessment in respect of which that estimate has been furnished.

B) EXISTING COMPANY

Every company is required to furnish an estimate of its tax payable for the abovesaid Year of Assessment (YA). The estimated tax payable shall not be less than 85% of the revised estimated tax / estimated tax for the previous year’s YA provided with justifiable reason(s). Kindly take note of these important dates and advice us on what’s the amount of Estimated Tax should be inserted on the prescribed form.

Eg: –

a) Company’s Financial Year-End                                                                      31-12-2007

b) Form CP204 to be forwarded to Inland Revenue Board(IRB) latest by               30-11-2007

c) 1st Revised Estimate to be given to IRB on Form CP204A latest by                                       (i.e; 6th month after the commencement of basis period)                               31-05-2008

d) 2nd Revised Estimate to be given to IRB on Form CP204A latest by                                      (i.e; 9th month after the commencement of basis period)                               31-08-2008

Should there be any estimated tax payable, the installments as tabulated in the said form has to be settled commenting 10th of each month concerned effective after your FYE.

For item (c) and (d) above, we shall assume no revision is required if we do not hear from you by then. Should you require to submit a revised tax estimate, kindly revert back to us before the 15th of the indicated month concerned.

Should there be a difference on the tax payable for the abovestated YA in comparison to estimate/revised estimate given and the difference is in excess of 30% from the actual tax payable, the excess will be subjected to a 10% increase without further warning.

 

TAX TREATMENT FOR SMEs

With effective from Year of Assessment 2008, Small and Medium Enterprises (SMEs) is not required to furnish an estimate of tax payable or  make installments payment for a period of 2 years beginning from the year of assessment in which the SME commences operation.

However, the tax payable for the relevant years of assessment have to be settled upon the submission of the income tax returns which is not later than seven(7) months from the date of the Company’s financial year-end.

SMEs are defined as companies having a paid-up capital in respect of ordinary shares of RM2.5 million and below at the beginning of the basis period for the relevant years of assessment.

Address

#7-2, Jalan 4/93,
Taman Miharja, 55200 Kuala Lumpur.
Phone: 603-9281 1588
Fax: 603-9281 6885
Website: http://www.fswongco.com
Email: tan@fswongco.com

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