TUTORIAL 3 (topic 4 and 5)

Topic 4: self-assessment for companies

1. Income tax payable (ITP) estimate- Form CP204
-existing co: 30 days before the beginning of the basis period (BP) for the YA
-New Co.(x-SME): within 3 months from the date of commencement
-New Co.(SME): submit the Form but no need to write in the ITP estimate (nil)
-amount= not less than 85% of last YA’s estimate/revised estimate

2.monthly instalment
-exiting co:1st instalment starts on the 15th of the 2nd mth of the BP
-new co.(x-SME): 1st instalment starts on the 15th of the 6th mth of the BP
-No. of instalment= no. of mths in the BP
3. .Revision ITP estimate- Form CP204A
-to be done in the
-6th mth of the BP
-9TH mth of the BP
-6TH & 9TH mths of the BP
Check the mthly instalment amount, re-computation
4. submission of tax return (Form c)
-within 7 mths after the closing of the accounts
- amendment is allowed only once within 6 mths from submission

Question 1
Kerusi Sdn. Bhd. (KSB) is a Malaysian tax resident. It has been in operations for the past twelve years
（existing co）and closes its accounts on 31st March annually.

BP0/04-31/3

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At the beginning of the financial year, KSB’s tax manager estimated that the company’s tax for
YA2020 was RM120,000. The final tax payable by KSB to IRBM for YA2020 was RM150,000.
Required:
In respect to YA2021: 1/4/2020-31/03/2021
a. State and explain the due date for the submission of its tax return. (FORM C)
= form c must be submitted within 7 mths from the closing of the company’s accounts. For KSB, the
submission must be made on or before 31/10/2021 which is 7 mths after its end of basic period i.e
31/03/2021
b. State and explain the date by which it should furnish its initial tax estimate.
form cp204 must be submitted no later than 30 days before the beginning of the vasis period for
the YA. For KSB, the submission must be made on or before 1/03/2020 which is 30 days before
the beginning of its basis period for YA 2021 i.e 01/04/2020

c. State and explain the minimum amount of estimate it must furnish.

The minimum estimate of income tax payable for a YA must not be lesser than 85% of last YA’S
estimated/ revised estimate
Estimated of income tax payable for YA2021 of KSB=85% x RM120K = RM102k

d. State when the tax estimate may be revised.

The tax estimate can be revised on the 6 th month 9th month or both months in the basis period of the
YA
For KSB, the revision can be made on September 2020(6 th month), December 2020 (9th month), or
both September & December 2020 (6th &9TH months) of the basis period for YA 2021

e. State, with reasons, the due dates for the first and last tax installments to be paid.
the first installment is to be paid on the 15 th of the 2ndmonth of the basis period. The monthly
installments will consist of equal no. of months in that basis period for the YA.
For KSB, the 1st installment will be paid on 15th may 2020. Since its basis period for YA 2021 has 12
mth. It will pay 12 installments for YA2021. So, the final installments. I.E the 12 th installment will be
paid on the 15th aril 2021.

Question 2
Alad Dyn Sdn. Bhd. (ADSB) closes its accounts on 30th September annually. BP:0.1/10-30/09
Its income tax payable for YA2020 is RM268,235. (ACTUAL)
On 31.08.2020, the accounts department estimated the tax payable for YA2021 to be RM210,000.
The estimate originally submitted to the IRBM was subsequently revised to RM242,000 and
submitted on 20.03.2021.
The tax payable as per the return filed by ADSB turned out to be RM366,000.
Required:

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a. Prepare a schedule(Table) with regard to the submission of the estimate/revised estimate of tax
payable, remittance of installment payments, and filing of the tax return for YA2021 in terms of
the amount, the prescribed forms, and the dates prescribed by law where applicable.
BP YA 2021: 01/10/2020-30/09/2021 (12 mths)

date RM
Submission of estimate of tax Before 01/09/2020 85%x RM268,235
payable not later than 30 =228,000
days before the start of the FORM CP204
period.

Amount must not be less

than 85% of the
estimate/revised tax payable
for YA 2020.
Remittance of installment 1ST installment: RM228,000/12 mths
payments (12 monthly 15/11/2020 =RM19,000
installments commencing on
the 2nd month of the basis Last installment
period.) 15/10/2021

Form CP207
Submission of revised 6TH MTH is March 2021 RM242,000
estimate of tax payable can
only be made in the 6th month Formcp204A
(or 9th month) of the basis
period.
Remittance of revised Revised installment starts in RM242,000 –
installment payments 15/04/2021 (19KX5MTHS)
following the revised estimate = RM147,000/7
Form CP207 =RM21,000
Filling of tax return within 7 By 30th April 2022
months from the date
following the closing of Form C
accounting date

b. Compute the amount owing to the IRBM by Alad Dyn Sdn. Bhd. at the time of submission of the
tax return, and state when this amount is due and payable.

Actual tax payable RM366,000

LESS: revised estimate (total installment paid) (RM242,000)
Shortfall 124,000
Less: margin of error (30% x RM 366,000) (109,800)
Difference 14,200
Penalty of underestimation of ITP= 10% X RM 1,420= RM,1,420
Amount to pay IRBM= RM124,000 + 1420= rm125,420
Due date by 30th April 2022 (within 7 months from the date following the closing of accounting
date)

Topic 5 dividend & tax imputation system

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Single tier dividend system: all Malaysian derived dividend income paid, credited or distributed by
resident companies will be tax exempt in the hands of shareholders.
A company is treated as a separate tax entity without any integration with the shareholders.
Income tax paid by the company is a final tax.
Dividend paid out to the shareholders will be exempted from tax in the hands of the shareholders.
Advantages: slide 4 (3 advantages)

Question 3
MMOB Sdn. Bhd. (MMOB) is a tax resident company in Malaysia. Since its incorporation in the year
2003, it has been in the business of manufacturing office furniture.
In the year 2017, MMOB’s top management has agreed for the company to go public and rebrand
itself as MMOB Bhd. Its IPO has been successfully completed in the year 2018. In view of its stellar
financial result in 2021, MMOB Bhd. has decided to issue its first ever dividend payment to its
shareholders.
Required:
a. Describe the dividend system that is applicable to MMOB Bhd.
Single tier dividend system where all Malaysian derived dividend income paid, credited or
distributed by resident companies will be tax exempt in the hands of shareholders.
b. Explain the mechanism of this dividend system.
A company is treated as separate tax entity without any integration with the shareholders
-income tax paid by the company is a final tax
-dividend paid out to the shareholders will be exempted from tax in the hands of the
shareholders

c. How does this dividend system be more superior that the old, repealed system?
Advantages: slide 4 (3 advantages)