LHDN CP204 Tax Instalment New Timeline, No More Cross-Year Tax Payments
The Inland Revenue Board (LHDN) has amended the timeline for CP204 corporate tax instalment to eliminate overlapping cross-year payments. If you are a director, business owner, or financial controller, you need to understand how the upcoming YA 2027 Transitional Rules and the YA 2028 Instalment Rules will affect your company’s monthly cash flow.
The Timeline Roadmap
YA 2026 Current Practice
Standard 12-month payment cycle
First Payment : 2nd month of the financial period
Last Payment : 1st month of the next financial period
YA 2027 Transitional Rules
Compressed into an 11-month cycle
First Payment : 2nd month of the financial period
Last Payment : 12th month of the financial period
YA 2028 New Rules
Standard 12-month payment cycle
First Payment : 1st month of the financial period
Last Payment : 12th month of the financial period
Case Study Scenario
ABC Sdn Bhd
Financial Year End : December
Annual CP204 Tax Estimate : RM24,000
Calendar Month | YA 2026 (FYE 01.01.2026 - 31.12.2026) | YA 2027 (FYE 01.01.2027 - 31.12.2027) | YA 2028 (FYE 01.01.2028 - 31.12.2028) |
January | - | - | RM 2,000 |
February | RM 2,000 | RM 2,181.82 | RM 2,000 |
March | RM 2,000 | RM 2,181.82 | RM 2,000 |
April | RM 2,000 | RM 2,181.82 | RM 2,000 |
May | RM 2,000 | RM 2,181.82 | RM 2,000 |
June | RM 2,000 | RM 2,181.82 | RM 2,000 |
July | RM 2,000 | RM 2,181.82 | RM 2,000 |
August | RM 2,000 | RM 2,181.82 | RM 2,000 |
September | RM 2,000 | RM 2,181.82 | RM 2,000 |
October | RM 2,000 | RM 2,181.82 | RM 2,000 |
November | RM 2,000 | RM 2,181.82 | RM 2,000 |
December | RM 2,000 | RM 2,181.80 | RM 2,000 |
January (Next Year) | RM 2,000 | - | - |
Action Plan for Business Owner
Strategic Cash Flow Preparation Prepare your budget for YA 2027 because the monthly installment amounts will increase slightly. Also, save up early for YA 2028 since tax starts in Month 1.
On-Time Payment LHDN requires all monthly CP204 payments to be settled by the 15th day of every calendar month. Missing this by even one day triggers an automatic 10% late payment penalty on that installment.
Monitoring of the 30% Variance Allowance If your actual final business tax ends up being 30% higher than what you estimated on your CP204, a 10% underestimation penalty will be levied on the differences.
