What is CP204 in Malaysia?

CP204 is the tax estimate form that companies must submit to LHDN before the start of each financial year. It estimates the tax payable for the coming year, paid in monthly installments.

CP204 must be submitted 30 days before the start of the basis period (financial year). For a company with Dec year-end, submit by 30 November of the preceding year.

Can I revise my CP204 estimate?

Yes, you can revise via CP204A in the 6th or 9th month of your basis period. The revised estimate must be equal to or higher than the original. This helps avoid the 30% under-estimation penalty.

What happens if I don't submit CP204?

Failure to submit CP204 results in LHDN issuing a deemed estimate (usually based on previous year). You will still be required to pay monthly installments based on that deemed amount, and penalties apply for non-payment.

How do I pay CP204 installments?

CP204 installments are paid monthly via ByrHASiL (online), bank payment counters, or internet banking. Payment is due by the 15th of each month during the basis period.

Is CP204 the same as income tax?

CP204 is not your final tax. It is an advance estimate paid in installments throughout the year. Your actual tax is determined when you file Form C (tax return). Any overpayment is refunded, and underpayment must be settled.

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CP204 Tax Estimate Malaysia 2026 — Complete Guide

Q: What is the penalty for CP204 under-estimation?

If actual tax exceeds CP204 estimate by more than 30%, a 10% penalty is imposed on the difference between actual tax and the estimate.

Q: Who must submit CP204?

All companies registered with SSM and having a tax file with LHDN must submit CP204, including dormant companies. Only companies in their first two years of operation are exempt from the 30% penalty rule.

Updated May 2026 · Krofio AI Tax Platform

CP204 is your company's tax estimate for the upcoming financial year. Every company registered with LHDN must submit this form and pay tax in monthly installments based on the estimate. Getting it wrong — either too low or failing to submit — results in penalties that can significantly impact your cash flow.

This comprehensive guide covers everything Malaysian business owners and accountants need to know about CP204 in 2026: how to calculate the estimate, submission deadlines, the revision process (CP204A), penalty rules, and strategies to optimize your estimate.

What is CP204?

CP204 (Borang CP204) is the tax estimate form prescribed under Section 107C of the Income Tax Act 1967. It requires every company to estimate its tax payable for the coming basis period and pay that amount in equal monthly installments throughout the year.

Think of CP204 as a "pay-as-you-earn" system for companies. Instead of paying one lump sum at year-end, LHDN collects tax progressively. This ensures steady government revenue and prevents companies from facing a massive tax bill at once.

Who Must Submit CP204?

All Sdn Bhd companies (private limited)
Public limited companies (Berhad)
Limited liability partnerships (LLP)
Trust bodies and cooperatives
Dormant companies (submit nil estimate)

New Company Exemption: Companies in their first and second year of operation are exempt from the 30% under-estimation penalty. However, they must still submit CP204 and pay installments.

Key Deadlines for CP204

Action	Deadline	Notes
CP204 submission	30 days before basis period starts	e.g., Dec year-end → submit by 30 Nov
First installment payment	15th of first month of basis period	e.g., Jan year-end → pay by 15 Jan
CP204A (6th month revision)	In the 6th month of basis period	Must be ≥ original estimate
CP204A (9th month revision)	In the 9th month of basis period	Must be ≥ original estimate
Monthly installment payment	15th of each month	12 equal payments
Form C filing (actual tax)	7 months after year-end	Final reconciliation

Example: December Year-End Company

If your financial year runs January to December 2026:

Submit CP204 by 30 November 2025
First installment due 15 January 2026
6th month revision window: June 2026
9th month revision window: September 2026
Last installment: 15 December 2026
File Form C by 31 July 2027

How to Calculate CP204

There is no fixed formula mandated by LHDN. However, the standard approach used by most tax agents follows this method:

Step 1: Start with Previous Year's Tax

Use your company's actual tax payable from the most recent Form C filing as the baseline. This is the most defensible starting point if LHDN queries your estimate.

Step 2: Adjust for Known Changes

Consider factors that will affect the coming year:

Revenue growth: New contracts, expanded operations, price increases
Revenue decline: Lost clients, market downturn, seasonal factors
Cost changes: New hires, rent increases, loan repayments
Capital allowance: New asset purchases that increase deductions
One-off items: Asset disposals, insurance claims, legal settlements

Step 3: Apply Current Tax Rates

Chargeable Income	SME Rate	Non-SME Rate
First RM150,000	15%	24%
RM150,001 – RM600,000	17%	24%
Above RM600,000	24%	24%

Step 4: Divide by 12

Your total estimated tax divided by 12 gives the monthly installment amount. Each payment is due by the 15th of the month.

Calculation Example

Company ABC Sdn Bhd (SME-eligible, Dec year-end):

Last year actual tax: RM85,000
Expected revenue growth: 20%
New capital allowance (vehicle): -RM15,000 tax effect
Estimated tax for 2026: RM85,000 × 1.2 - RM15,000 = RM87,000
Monthly installment: RM87,000 ÷ 12 = RM7,250/month

The 30% Rule — Under-Estimation Penalty

This is the most critical rule for CP204. Under Section 107C(9):

If your actual tax exceeds your CP204 estimate by more than 30%, a 10% penalty is imposed on the difference.

How the Penalty is Calculated

Scenario	Estimate	Actual Tax	Difference	Penalty
Within 30%	RM100,000	RM125,000	25% over	No penalty
Exceeds 30%	RM100,000	RM150,000	50% over	10% × RM50,000 = RM5,000
Severely under	RM50,000	RM200,000	300% over	10% × RM150,000 = RM15,000

Important: The penalty is calculated on the difference between actual tax and the estimate — not on the 30% threshold. Even if you're 31% over, the penalty applies to the full difference amount.

Strategies to Avoid the Penalty

Estimate conservatively high: Better to overpay and get a refund than face penalties
Use CP204A revision: If mid-year results show higher profits, revise upward immediately
Monitor monthly P&L: Track actual vs projected performance quarterly
Consider timing of revenue: Large contracts signed mid-year may push actual tax above estimate

CP204A — Revising Your Estimate

CP204A allows you to revise your tax estimate during the basis period. This is your safety net against the 30% penalty.

Revision Rules

Can revise in the 6th month or 9th month of your basis period
Revised estimate must be equal to or higher than the original CP204
You cannot reduce your estimate via CP204A
Remaining installments are recalculated based on the new estimate
Submit via e-Filing (TAe) or manual form to LHDN

CP204A Calculation Example

Original CP204: RM120,000 (RM10,000/month). After 6 months, you realize actual profit is tracking 40% higher.

Revised estimate: RM168,000
Already paid (6 months): RM60,000
Remaining to pay: RM168,000 - RM60,000 = RM108,000
New monthly installment (months 7-12): RM108,000 ÷ 6 = RM18,000/month

Common Mistakes with CP204

Submitting nil estimate when profitable: LHDN will issue a deemed estimate and you lose control
Forgetting to revise: If Q1-Q2 shows strong growth, revise in month 6 — don't wait
Using last year's figure blindly: If you won a major contract, last year's number is irrelevant
Late payment of installments: 10% penalty on each late installment, compounding monthly
Not accounting for capital allowance: New asset purchases reduce taxable income — factor this in

How to Submit CP204

Log in to MyTax (mytax.hasil.gov.my)
Navigate to e-CP204
Enter estimated tax payable for the basis period
System auto-calculates monthly installment
Submit and save acknowledgment

Alternatively, your tax agent can submit on your behalf via TAe (Tax Agent e-Filing system).

Payment Methods for CP204 Installments

ByrHASiL: Online payment via LHDN portal
Internet banking: Available through most Malaysian banks (Maybank, CIMB, Public Bank, etc.)
Bank counter: Over-the-counter payment with CP207 payment slip
Direct debit: Set up auto-payment through your bank

AI-Powered CP204 Calculator

Krofio analyzes your current year performance and recommends the optimal CP204 estimate to avoid penalties while minimizing cash flow impact.

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CP204 vs Form C — What's the Difference?

Aspect	CP204	Form C
Purpose	Estimate future tax	Report actual tax
When	Before year starts	After year ends
Payment	Monthly installments	Balance of tax (if any)
Revision	CP204A (6th/9th month)	Amended return
Penalty	30% under-estimation rule	Late filing penalty

Special Situations

Dormant Companies

Even dormant companies must submit CP204. Submit a nil estimate (RM0). If the company becomes active mid-year, submit a revised CP204 immediately.

Companies with Losses

If your company has accumulated losses (unabsorbed business losses), you may submit a nil or low CP204 estimate. However, ensure you can justify this if queried — maintain documentation showing projected losses.

Change of Financial Year-End

If you change your accounting period, a new CP204 must be submitted for the new basis period. Consult your tax agent as the transition period rules are complex.