C4 - Basis Period

CHAPTER 4
BASIS PERIOD
DR ARYATI JULIANA SULAIMAN 1
BASIS OF ASSESSMENT
All income of persons other than a company, limited liability partnership (LLP), trust body and
cooperatives society are assessed on a calendar year basis (1 January - 31 December)
Company, LLP, trust body and cooperatives society are the financial year ending in that particular
year of assessment

BASIS PERIOD FOR COMPANY, LLP, TRUST
BODY AND CO-OPERATIVE SOCIETY
Section 21A (1) stated that the basis year for a year of assessment shall constitute, in relation to a source of
a company, LLP, trust body and co-operative society, the basis period for that year of assessment.
Example 1: Alchemy Sdn Bhd closes its account on 31 December each year. What is the basis
period for Alchemy Sdn Bhd for YA 2022?
Suggested answer: Basis period for Alchemy Sdn Bhd for YA 2022 is 01/01/2022 – 31/12/2022
Section 21A (2) stated that where a company, LLP, trust body or co-operative society has made up the
accounts of its operation for a period of 12 months ending on a day other than 31 December in the basis
year, that period shall constitute the basis period for that year of assessment for any sources of income.
Example 2: Bravo Sdn Bhd closes its account on 31 July each year. What is the basis period for
Bravo Sdn Bhd for YA 2022?
Suggested answer: Basis period for Bravo Sdn Bhd for YA 2022 is 01/08/2021 – 31/07/2022

BASIS PERIOD FOR OTHER TAXPAYERS
Individuals, a unit/property trust, an estate under administration, a club, an association, a Hindu
joint family), the basis period is the calendar year
The basis period for individual taxpayer for YA 2022 is the period from 1 January 2022 to 31
December 2022

DETERMINATION OF BASIS PERIOD -
Commencement of Operations
i. Commencement of business;
ii. Existing operation commencing new operation;
iii. Requirement under law; or
iv. Same accounting date as related companies in a group.

i. Commencement of business
The first year of assessment is based on the closing date of the accounts which will constitute
the basis period for a year of assessment
3 possible situations for a company which just commences its operation:
a. The company makes up its accounts less than 12 months
ending on a day in the same year
b. The company makes up its accounts for any period of months ending
on a day immediately following basis year (second basis year)
c. The company makes up its accounts for a period more than 12
months ending on a day in the third year of assessment

the basis period is referred to date from the commencement date until the date where the first set of accounts is made.
Under situation (a) that period is regarded as basis period for the first year of assessment, under situation (b) there is nobasis
period for the first year of assessment, while under situation (c), there is no basis period for the first and second year of
assessments.
Example 3: Ceria Bhd. commenced its business on 1 February 2022 and closed its first account on 31
October 2022 (9 months) and continues to close on 31 October for subsequent years. What are the basis periods for Ceria
Bhd for year assessment of 2022 and 2023?
Suggested answer:
Based on the provision of Section 21A(4)(a), that period shall constitute the basis period for the first year
of assessment. Therefore:
Year of Assessment Basis Period Period
YA 2022 01/02/2022 – 31/10/2022 9 months
YA 2023 01/11/2022 – 31/10/2023 12 months
The first account closed in 2022. The first accounting period from 1 February until 31 October 2022 (9 months) is accepted as
the basis period for the first year of assessment.

Example 4: Dharma Bhd commenced its business on 1 Jun 2021 and closed its first account on 30 April 2022 (11
months) and continues to close on 30 April for subsequent years. What are the basis periods for Dharma Bhd for
year assessment of 2021, 2022 and 2023?
Suggested answer:
Based on the provision of Section 21A(4)(b), that period shall constitute the basis period for the first year of
assessment. There shall be no basis period for the first year of assessment (YA 2021). Year of assessment will
begin from YA 2022. Therefore:
YA 2021 No basis period
YA 2022 01/06/2021 – 30/04/2022 11 months
YA 2023 01/05/2022 – 30/04/2023 12 months
Please note that, there is no basis period for the year of assessment 2021. The first accounts are prepared from 1
Jun 2021 until 30 April 2022 (11 months). The period is accepted as the basis period for year of assessment 2022.

Example 5: Eureka Corporation Bhd commenced its business on 1 March 2021. The first set of accounts
was prepared for a period from 1 March 2021 until 31 May 2022 (15 months). For subsequent years the
accounting date of the company is 31 May. What are the basis periods for this company for the year of
assessment of 2022 and 2023?
Suggested answer:
The basis periods for Eureka Corporation Bhd are:
YA 2022 01/03/2021 – 31/05/2022 15 months
YA 2023 01/06/2022 – 31/05/2023 12 months
Please note that there is no basis period for year of assessment 2021. Although the operation began in
2021, the first accounts closed in 2022. The period of 15 months ending on 31 May 2022 is taken as the
basis period for the year of assessment 2022.

Example 6: Fareeda Sdn Bhd commenced its business on 1 October 2020 and prepared the first set of
account for a period from 1 October 2020 to 31 March 2022 (18 months). The next accounting period is
from 1 April 2022 to 31 March 2023. What are the basis periods for Fareeda Sdn Bhd for year of
assessment of 2020 to 2023?
Suggested answer:
Based on provision of Section 21A(4)(c), the period shall constitute the basis period for the year of
assessment immediately following the second year of assessment and there shall be no basis period for
the first and second year of assessment. Therefore:
YA 2022 01/10/2020 – 31/03/2022 18 months
YA 2023 01/04/2022 – 31/03/2023 12 months
Please note that there is no basis period for year of assessment 2020 and 2021. The first set of accounts
are prepared covering 3 calendar years (2020 to 2022) and closed in 2022. The period (18 months) is
accepted as the basis period for the first year of assessment (YA 2022).

ii. Existing operation commencing new
operation
When a company already carrying on one or more businesses, commences a new business
(operation), then the new business (operation) will be treated as having the same basis period
as the old business(es).
Example 7: High Tech Sdn Bhd has been in operation for the past five years and
closes its accounts on 30 June annually. On 1 March 2022, the management of the
company decided to venture into a new business. Determine the basis period of the old
and new business for year assessment of 2022.
Suggested answer:
The basis period for new operations is the same as the accounting period of existing operation. Therefore, the basis period for
the new operation for the YA 2022 is the period ending 30 June 2022.
Year of Assessment Basis Period
Old Business New Business

YA 2022 01/07/2021 - 30/06/2022 01/03/2022- 30/06/2022

iii. Requirement under law
When a company commences a business and is required by the law of the place of incorporation
to close its accounts on a specified date, basis period is the period from the date of
commencement to that accounting date.
Example 8: Lamda (UK) Pte. Ltd. commenced operations on 20 November 2020 and closed its
first accounts to 30 June 2022 as required by the British law. Determine the basis period for
Lamda (UK) Pte. Ltd. for the year of assessment of 2022.
Suggested answer:
For YA 2022 the basis period is 20/11/2020 to 30/06/2022. In this case there is no basis period for
YA 2020 and YA 2021.

iv. Same accounting date as related
companies in a group
When a company being a member of a group of companies, it should follow the group of companies’
financial year end (FYE).
Example 9: Joyce Sdn Bhd commenced a business on 20 February 2021 and became a member of a
Kirana group of companies which closes its account on 31 October annually. Determine the basis
period of Joyce Sdn Bhd for year of assessment 2021 and 2022.
Suggested answer:
In this case, Joyce Sdn Bhd has to follow accounting year end of Kirana Sdn Bhd. Therefore, Joyce Sdn
Bhd should also close its accounts on 31 October every year.
YA 2021 20/02/2021 - 31/10/2021
YA 2022 01/11/2021 - 31/10/2022

DETERMINATION OF BASIS PERIOD –
Changing the Accounting Date
There are several circumstances related to the change of accounting period:
i. New Accounts are Prepared for a Period of Less Than 12 Months and Ending in the Same
Year
ii. New Accounts are Prepared for a Period of Less Than 12 Months and Ending in the
Following Year
iii. New Accounts are Prepared for a Period of More Than 12 Months and Ending in the
Following Year
iv. New Accounts are Prepared for a Period for More Than 12 Months and the New Accounts
Ending in the Third Year

i. New Accounts are Prepared for a Period of Less Than 12 Months and Ending in the Same Year
If a company changed the accounting date for a period which is less than 12 months and ending in the same
year, the basis period for the failure year will cover the entire period from accounting period in the failure
year and the next accounting period.
Example 10: Vortex Bhd normally prepared its account on 31 March each year. In 2022, the date has been changed to 31 December. The accounts were prepared as follows:
01/04/2021 – 31/03/2022 (Normal accounting date)
01/04/2022 – 31/12/2022 (9 months - failure year, ending in the same year in, i.e. - 2022)
01/01/2023 – 31/12/2023 (12 months)
Determine the basis period for Vortex Bhd for year assessment 2022 to 2024.
Suggested answer:
YA 2022 01/04/2021 – 31/03/2022 12 months (normal)
YA 2023 01/04/2022 – 31/12/2023 21 months
YA 2024 01/01/2024 – 31/12/2024 12 months
For YA 2023 the basis period covers the two accounting periods which are from 1 April 2022 to 31 December 2022 and 1 January 2023 to 31 December 2023. The basis period for YA
2024 is from 1 January 2024 until 31 December 2024.

ii. New Accounts are Prepared for a Period of Less Than 12 Months and
Ending in the Following Year
If a company changed its normal accounting date for a period less than 12 months and the new accounting date ending in
the following year, the period would be accepted as the basis period for the year of assessment.
Example 11: Warisan Sdn Bhd closes its accounts on 30 September every year. In 2021 the company decided to change its
accounting date to 31 March. The accounts were prepared as follows:
01/10/2019 – 30/09/2020 (Normal accounting date)
01/10/2020 – 31/03/2021 (6 months - failure year, cover two years of assessment, i.e. - 2020 and 2021)
01/04/2021 – 31/03/2022 (12 months)
Determine the basis period for Warisan Sdn Bhd for YA 2020 to 2022.
Suggested answer:
Since there is a failure to make up the accounts of the company, ending on the corresponding day in the following basis year,
the Director General may direct Warisan’s accounting periods as follows:
YA 2020 01/10/2019 – 30/09/2020 12 months (normal)
YA 2021 01/10/2020 – 31/03/2021 6 months
YA 2022 01/04/2021 – 31/03/2022 12 months
The period (01/10/2020 – 31/03/2021) is accepted as the basis period. There should not be any missing year of assessment.
iii. New Accounts are Prepared for a Period of More Than 12 Months and
Ending in the Following Year
If a company changes its normal accounting date to a new accounting date which cover a period of more than 12 months and the new accounting
period ending in the following year of assessment, the new accounting period will be accepted as the basis period.
Example 12: One Network Bhd changed its financial year end from 30 June to 30 September in the following year. Its accounts for 2020 to 2022
were made up to the following dates:
Year ended 30/06/2020 (12 months – normal date)
01/07/2020 – 30/09/2021 (failure year - 15 months, ending in 2021)
Year ended 30/09/2022 (12 months)
Determine the basis period of One Network Bhd. for relevant year of assessment.
Suggested answer:
The basis periods for One Network Sdn Bhd would be:
YA 2020 01/07/2019 – 30/06/2020 12 months
YA 2021 01/07/2020 – 30/09/2021 15 months
YA 2022 01/10/2021 - 30/09/2022 12 months
YA 2021 is a failure year, and the accounting period is more than 12 months, the period is accepted as basis period for YA 2021. Therefore, the
basis period for 2021 is from 01/07/2020 to 30/09/2021 (15 months).

iv. New Accounts are Prepared for a Period for More Than 12 Months and the New Accounts Ending in the Third
Year
If a company change its accounting date to a new date which covers a period of more than 12 months and the
new accounting period is ending in the third year of assessment, the new accounting period will be apportioned
equally. In this case, there will be two failure years. For odd numbers, the 0.5 will be added to the 1st failure
year.
Example 13: On 1 December 2022, the board of director of Adam Bhd decided to change its financial year
end from 30 November to 28 February. The new accounting period covers the periods from 1 December
2022 to 28 February 2024 (15 months.).
Determine the basis period of Adam Bhd for the year assessment of 2022 to 2024.
Suggested answer:
Normal accounting date for Adam Bhd is 30 November and it was changed to 28 February beginning from
2024. The new accounting period from 1 December 2022 to 28 February 2024 will be divided into two basis
period as follows:
YA 2022 01/12/2021 - 30/11/2022 12 months (normal)
YA 2023 01/12/2022 - 31/07/2023 8 months *
YA 2024 01/08/2023 - 28/02/2024 7 months
* Since total number of months is odd (15 months) or 7.5 months for each basis period, the 0.5 will be
added to the first failure year.
COMPANY JOINING A PARTNERSHIP
A company may join a partnership to venture into a new business. If a company joins a partnership, the
partnership will be regarded as a new business of the company. The basis period of the existing business is also the
basis period for partnership source.
Example 14: Restu Sdn Bhd closes its account on 30 April every year. In 2022, the company joined a partnership
which commenced business on 18 March 2022. The first account of the partnership has been prepared for a
period to 30 June 2022. Determine the basis period of the partnership for the year of assessment 2022 and 2023.
Suggested answer:
In this case, the basis period of the partnership has to follows the accounting period of Restu Sdn Bhd. Therefore,
the basis periods for partnership source for the year of assessment 2022 and 2023 would be as follows:
YA 2022 18/03/2022 – 30/04/2022 (2 months)
YA 2023 01/05/2022 – 30/04/2023 (12 months)

BASIS PERIOD FOR COMPANIES UNDER
LIQUIDATION
The liquidator of a company under liquidation must prepare Liquidator Accounts of Receipts &
Payment and Statement of the Position in the Winding Up every six months from the date of
appointment as liquidator.
In determining the basis period for the failure year and subsequent years for a company under
liquidation, the accounting period prepared by the company in the failure year would be accepted by
the DGIR provided that:
a. There is no missing year of assessment.
b. There shall not be two or more accounts closed in the same year of
assessment which will be taken as the basis period for the failure year or the year of
assessment following the failure year.
c. The first set of accounts of the failure year will be used as a basis
period for the failure year or that accounts will be combined with
the next accounts and taken as the basis period for the year of
assessment in the failure year.

Change of Accounting Period Following
the Liquidation
i. New Accounts are Prepared for Less Than 12 Months and Ending in the Same Year Before Liquidation
The first set of accounts in the failure year will be taken as the basis period for the failure year, or accounts will be
combined with the next set of accounts and taken as basis period for a year of assessment.
Example 15: Sala Sdn Bhd prepares its accounts on 31 March each year. In 2021, the company is in the process of
voluntary liquidation and the liquidator was appointed on 21.7. 2021 to take over the company affair during the
liquidation process. The accounting periods for the company are as follows:
Year of Assessment Accounting Period Period
2021 (before liquidation) 01/04/2020 – 31/03/2021 12 months
Failure year 01/04/2021 – 20/07/2021 3 months 20 days
21/07/2021 – 20/01/2022 6 months
21/01/2022 – 20/07/2022 6 months
21/07/2022 – 20/01/2023 6 months

Suggested answer:
The basis periods of Sala Sdn Bhd are determined as follows
Year of Assessment
Basis Period Period
2021 01/04/2020 – 31/03/2021 12 months
2022 01/04/2021 – 20/07/2021 3 months 20 days
21/07/2021 – 20/01/2022 6 months
2023 21/01/2022 – 20/07/2022 6 months
21/07/2022 – 20/01/2023 6 months
The failure year occurs in 2021. The DGIR will determine the basis periods for year assessment 2021 onwards. The new
accounting period (01/04/2021 – 20/07/2021) and the following accounting period (21/07/2021 – 20/01/2022) are
combined and taken as the basis period for the year of assessment in the failure year. The next two 6-month accounting
periods form the basis period for the subsequent years of assessment.

ii. New Accounts are Prepared for Less Than 12 Months and Ending in the Following Year
The first set of accounts closed in the failure year is taken as the basis for the year of assessment in the failure year.
Example 16: Tabah Holding Berhad is in the process of liquidation. The company was put under liquidation on
16.8.2022 and a liquidator was appointed on the same date. The company closes its account on 30 September
each year prior to the liquidation. After the liquidation, the accounts were prepared as follows:
16/08/2022 – 15/02/2023 6 months
16/02/2023 – 15/08/2023 6 months
16/08/2023 – 15/02/2024 6 months

Suggested answer:
The basis period of Tabah Holding Bhd are determine as follows:
Year of Assessment
Basis Period Period
2021 01/10/2020 – 30/09/2021 12 months
2022 01/10/2021 – 15/08/2022 10 months 15 days
2023 16/08/2022 – 15/02/2023 6 months
16/02/2023 – 15/08/2023 6 months
2024 16/08/2023 – 15/02/2024 6 months
Under this situation the first set of account for the failure year is from 01/10/2021 until the date of liquidation
15/08/2022 (10 months 15 days). The period is taken as a basis period for the year assessment 2022. The next two
6-month accounting periods form the basis period for the subsequent years of assessment.

iii. New Accounts are Prepared for More Than 12 Months and Ending in the Following Year
The first set of accounts in the failure year will be taken as the basis period for the failure year although the period
is more than 12 months. The next two-6 months accounting period form the basis period for the following year of
assessment.
Example 17: Undan Sdn Bhd is in the process of liquidation due to petition initiated by the shareholders. The
liquidation process began on 01.11.2022 and a liquidator was appointed on the same date. The normal accounting
date for the company is 30 June each year. After the liquidation process took place, the accounts were prepared as
follows:
Failure year 01/07/2021 – 31/10/2022 16 months
01/11/2022 – 30/04/2023 6 months
01/05/2023 – 31/10/2023 6 months
01/11/2023 – 30/04/2024 6 months

Suggested answer:
The company’s basis periods are determined as shown below:
Year of Assessment
Basis Period Period
2021 01/07/2021 – 30/06/2021 12 months
2022 01/07/2021 – 31/10/2022 16 months
2023 01/11/2022 – 30/04/2023 6 months
01/05/2023 – 31/10/2023 6 months
2024 01/11/2023 – 30/04/2024 6 months
The failure year occurred in YA 2022 (16 months), from 01/07/2021 to the date before the liquidation
(31/10/2022). The date is taken for the basis period for the year of assessment 2022. The next two 6-month
accounting periods form the basis period for the subsequent years of assessment.

iv. New Accounts are Prepared for More Than 12 Months and Ending in Third Year
If the company changes its accounting period and the new period end in the third year, the new accounting period will be
apportioned into two equal periods. Then, the two periods will be taken to be the basis periods for the first two years of
assessment commencing from failure year. When there is an uneven division of the basis period, any fraction of a month
should be treated as failing in the first basis period to form a complete month. The next two 6-month basis period form
the basis period for the following year of assessment.
Example 18: Syarikat Wanda Sdn Bhd was under voluntary liquidation on 11.2.2022. The liquidator was appointed on the
same date to take over the company’s affairs. Prior to the liquidation, the company closes its accounts on 31 October each
year. After the liquidation, the accounts were prepared as follows:
11/02/2023 – 10/08/2023 6 months
11/08/2023 – 10/02/2024 6 months
11/02/2024– 10/08/2024 6 months

Suggested answer:
The basis periods for Syarikat Wanda Sdn Bhd are determine as follows:
Year of Assessment
Accounting Period Period
2021 01/11/2020 – 31/10/2021 12 months
2022 01/11/2021 – 30/06/2022 8 months
2023 01/07/2022 – 10/02/2023 7 months 10 days
2024 11/02/2023 – 10/08/2023 6 months
11/08/2023 – 10/01/2024 6 months
The period 01.11.2021 to 10.02.2023 involved two years of assessment, the periods are divided into two periods
(YA 2022 – 8 months, YA 2023 – 7 months 10 days). For uneven division of basis period, any fraction of a month
should be treated as failing in the first period to form a complete month.

BASIS PERIOD FOR CERTAIN SITUATIONS
The Accounting Period for Failure Year is Too Short
The period may be accepted as the basis period. However, it will not reflect the activities carried out by the company
during that period. For practical purposes the period will not be taken as the basis period. The DGIR will accept an
accounting period of at least three months as the basis period. Thus, the period will be combined with the next period
and taken as basis period for the year of assessment. The next two 6-months periods form the basis period for the
subsequent year of assessment.
Example 19: YZ Properties closes its account on 31 December each year. The company commenced its liquidation
process on 10 January 2022 and the liquidator was appointed on the same date. The company accounts, therefore,
were prepared until 9 January 2022. After that, the liquidator’s accounts were prepared every 6 months.
Failure year 01/01/2022 – 09/01/2022 9 days
10/01/2022 – 09/07/2022 6 months
10/07/2022 – 10/01/2023 6 months
11/01/2023 – 09/07/2023 6 months

Suggested answer:
The basis periods for YZ Properties are determine as follows:
Year of Assessment
Basis Period Period
2021 01/01/2021 – 31/12/2021 12 months
2022 01/01/2022 – 09/01/2022 9 days
10/01/2022 – 09/07/2022 6 months
2023 10/07/2022 – 10/01/2023 6 months
11/01/2023 – 09/07/2023 6 months
The basis period from 01/01/2022 to 09/01/2022 is too short (only 9 days) to be taken as a basis period for 2022. The
period does not reflect the activities carried out by the company. For practical purposes the DG will accept accounting
period for at least three months. Therefore, the period from 01/01/2022 to 09/01/2022 (9 days) will be combined with
the next period (10/01/2022 to 09/07/2022 – 6 months) as a basis period for the year of assessment 2022. The next
two 6-months periods form the basis period for the subsequent year of assessment.

Company Under Liquidation with a Few Liquidators Being Appointed
During the liquidation process the appointed liquidators might resign and replace with another liquidator.
The DGIR shall direct the basis period for the failure year and the following years by applying the principles
set out in the Public Ruling applicable during the time.
Example 20: Zam Capital (accounting year end 31 December each year) was under voluntary liquidation on
20 November 2022 and the liquidators was appointed on the same date. Due to some reasons, the
liquidator was resigned, and a second liquidator was appointed on 10 April 2023. The company accounts
were prepared as follows:
Failure year 20/11/2022 – 09/04/2023 4 months 21days
10/04/2023 – 09/10/2023 6 months
10/10/2023 – 09/04/2024 6 months
10/04/2024 – 09/10/2024 6 months

Suggested answer:
The basis periods for Zam Capital are determined as follows:
Year of Assessment
Basis Period Period
2021 01/01/2021 – 31/12/2021 12 months
2022 01/01/2022 – 19/11/2022 10 months 19 days
2023 20/11/2022 – 09/04/2023 4 months 21 days
10/04/2023 – 09/10/2023 6 months
2024 10/10/2023 – 09/04/2024 6 months
10/04/2024 – 09/10/2024 6 months
The first failure year was in 2022. For 2022, the DGIR shall direct the basis period for the failure year by applying the
principles set out by PR 8/2014. The accounts in the failure year were prepared for a period of less than 12 months and
ended in same year. The period from 1/1/2022 to 19/11/2022 is accepted as the basis period for year of assessment
2022. The accounts in the second failure year (2023) were prepared for a period of less than 12 months and ended in
the following year. Therefore, the period is combined with the next period to form a basis period for year of assessment
2023. The next two 6-month periods form the basis period for the following year of assessment

Company’s Liquidation by Court Order
The accounting period is accepted for the basis period for the year of assessment. If more than one liquidator were appointed
and each liquidator closed the company accounts in the respective failure years, these periods are accepted as the basis
periods for the respective years of assessment, even though the accounts were prepared for a period less than six months. The
next two 6-month periods form the basis period for the following year of assessment.
Example 21: Armada Sdn Bhd, accounting date 31 December each year, was under liquidation by the court order. The effective
date for the court order was from 16 August 2022. The Department of Insolvency was named as the provisional liquidator from
the date of ordered. After liquidation, the first set of account was prepared until 5 July 2023. The joint liquidator was appointed
on 6 July 2023 and the accounts were prepared and closed on 5 December 2023. The following are the company’s accounting
periods before and after liquidation:
06/07/2023 – 05/12/2023 6 months
06/12/2023 – 05/06/2024 6 months
Determine the basis period for Armada Sdn Bhd for the year of assessment 2021 to 2024.

Suggested answer:
The basis periods are determined as shown below:
2021 01/01/2021 – 31/12/2021 12 months
2022 01/01/2022 – 15/08/2022 8 months 15 days
2023 16/08/2022 – 05/07/2023 10 months 21 days
2024 06/07/2023 – 05/12/2023 6 months
06/12/2023 – 05/06/2024 6 months
Note: The failure years were the years 2022 and 2023. Although the accounting periods for both failure
years are less than 12 months, these periods are accepted as the basis periods for the years of assessment
2022 and 2023 because both accounts are closed in the respective failure years. The next two 6-month
periods form the basis period for the following year of assessment.

Example 22: A liquidation order dated on 20 May 2022 has been received by Bintang Cerah Sdn Bhd. The normal
company accounting date of the company on 30 September each year. The following are the company’s
accounting periods before and after liquidation:
2021 01/10/2020 – 30/09/2021 12 months
20/05/2022 – 19/11/2022 6 months
20/11/2022 – 19/05/2023 6 months
20/05/2023 – 19/11/2023 6 months
20/11/2023 – 19/05/2024 6 months
Determine the basis periods of Bintang Cerah Sdn Bhd for the year of assessment 2021 to 2024.

Suggested answer:
The basis periods are determined as shown below:
2021 01/10/2020 – 30/09/2021 12 months
2022 01/10/2021 – 19/05/2022 7 months 19 days
2023 20/05/2022 – 19/11/2022 6 months
20/11/2022 – 19/05/2023 6 months
2024 20/05/2023 – 19/11/2023 6 months
20/11/2023 – 19/05/2024 6 months
Note: The accounting period of the failure year is accepted as a basis period for the year of assessment 2022. If the
company’s accounts are prepared for a period of 12 months ending on any date other than 31 December in a basis
year, that accounting period is the basis period for the year of assessment in which the accounts are closed. The next
two 6-month periods form the basis period for the following year of assessment.

COMPREHENSIVE EXAMPLE
A. Jasduit Sdn Bhd commenced its business on 1 September 2020 but has not decided on the appropriate date to close its
first set of accounts. In the board meeting, the following dates have been proposed:
i. The first accounts are prepared from 1 September 2020 to 31 December 2020 and thereafter to 31 December;
ii. The first accounts are prepared from 1 September 2020 to 31 December 2021 and thereafter to 31 December;
iii. The first accounts are prepared from 1 September 2020 to 31 March 2022 and thereafter to 31 March.
REQUIRED:
Determine the basis period for Jasduit Sdn Bhd under each situation for the relevant years of assessment until year of
assessment 2022.
B.Diamond Sdn Bhd commenced its retailing business in year 2012 and the company normally closes its account on 30 June
annually. In 2021, after closing the accounts on 30 June 2021, the management decided to close the next account on 30
September 2021 and continue to do so in subsequent years.
REQUIRED:
Determine the basis period for Diamond Sdn Bhd for year of assessment 2021 until 2022.

C. Cuci Merelit Sdn Bhd, a cleaning services has been operating since 2011 (financial year end 31 March). In 2020,
the company failed to close its account on 31 March, instead has closed its account on 28 February 2021. The
company prepared the following sets of accounts:
Accounting Period Adjusted income (RM)
1 April 2018 to 31 March 2019 25,800
1 April 2019 to 28 February 2021 32,300
1 March 2021 to 28 February 2022 18,600
REQUIRED:
Determine the basis period and adjusted income for Cuci Merelit Sdn Bhd for the year of assessment 2019 until
2022.
D. Kopicawan Sdn Bhd has been in food catering business since 2012. The company closes its account on 31
December annually. In 2021, the top management decided to join a partnership of retailing business which
commenced business on 13 September 2021. The first account of the partnership was closed on 30 June 2022.
REQUIRED:
Determine the basis period for the partnership business for the relevant years of assessment up to 2022.

SUGGESTED SOLUTION
A. Jasduit Sdn Bhd
(i)
2020 01/09/2020 - 31/12/2020 (4 months)
2021 01/01/2021- 31/12/2021 (12 months)
2022 01/01/2022 - 31/12/2022 (12 months)
(ii)
2020 No basis period
2021 01/09/2020 - 31/12/2021 (16 months)
2022 01/01/2022 - 31/12/2022 (12 months)
(iii)
2022 01/09/2020 - 31/03/2022 (19 months)

B. Diamond Sdn Bhd
2020 01/07/2019 - 30/06/2020
2021 01/07/2020 - 30/09/2021 (15 months)
2022 01/10/2021 - 30/09/2022
C. CuciMerelit Sdn Bhd
Year of Assessment Basis Period Adjusted Income
2019 01/04/2018 - 31/03/2019 25,800
2020 01/04/2019 - 31/03/2020 (12 months) 12/23 / x 32,300 = 16,852
2021 01/04/2020 - 28/02/2021 (11 months) 11/23 / x 32,300 = 15,448
2022 01/03/2021 - 28/02/2022 18,600
D. Kopicawan Sdn Bhd
2021 13/09/2021 - 31/12/2021
2022 01/01/2022 - 31/12/2022

NOTIFICATION OF CHANGE OF
ACCOUNTING PERIOD
If the companies change its accounting date, it will affect the time frame for submitting tax
estimates, instalment payment as well as the time frame for submitting the revised estimate.
From the Year of Assessment 2019, the provisions of subsection 21A (3A) of the ITA requires that
companies, co-operatives, trust bodies and LLPs to inform the DGIR of any change in accounting
period through the prescribed form (Form CP204B).
If companies make changes of accounting period and at the same time want to amend the tax
estimation, the submission of related forms must be made within the sixth (6th) or ninth (9th)
month of the basis period by submitting Form CP204B first before submitting e-CP204A.

The Accounting Period is Shortened
If the company change its accounting period for a period of less than 12 months and closed its accounts before the end of the
original accounting period, the companies need to notify the changes to DGIR 30 days before the end of the new accounting period.
Example 23: In 2022, Cermai Sdn Bhd decided to change its normal accounting date from 31 December to 30 June. When is the
deadline for the company to submit form CP204B to DGIR?
The deadline for the company to notify DGIR with regards to the change of its accounting date is 30 May 2022. The illustrations are
as follows:
Accounting Period Year of Assessment Basis Period Date to submit Form CP204B
Original
Account ended on
31 December 2022 01.01.2022 – 31.12.2022 2022 01.01.2022 – 31.12.2022
New
Account ended on
30 June 2022 01.01.2022 – 30.06.2022 2022 01.01.2022 – 30.06.2022 (6 months) At the latest
30 May 2022

The Accounting Period is Extended
If the company extend its accounting period more than 12 months from the original accounting period, the company
needs to notify the changes to DGIR 30 days before the end of the original accounting period.
Example 24: Dahlia Sdn Bhd closed its accounts on 31 April every year. In 2022, the company decided to close its
accounts on 30 September 2022. When is the deadline for the company to submit form CP204B to DGIR?
Suggested answer:
The deadline for the company to notify DGIR with regards to the change of its accounting date is 1 May 2022. The
illustrations are as follows:
Accounting Period Year of Assessment Basis Period Date to submit Form CP204B
Original:
Account ended on
30 April 2022 01.05.2021 – 30.04.2022 2022 01.05.2021 – 30.04.2022

Accounting Period Year of Assessment Basis Period Date to submit Form
CP204B
New:
Account ended on
30 September 2022 01.05.2021 – 30.09.2022 2022 01.05.2022 – 30.09.2022
(17 months) At the latest
31 March 2022

FAILURE TO NOTIFY CHANGE OF
ACCOUNTING PERIOD
a. 10% increase under subsection 107C (9) of the ITA in respect with the failure of the
taxpayer to make installment payments;
b. 10% increase under subsection 107C (10) of the ITA in respect with a difference
exceeding 30% between the actual amount of tax payable and amended tax
estimates or estimates the tax is deemed to be amended (whichever is later) or
estimated original tax (if no amended tax estimate or estimate deemed
amended tax is submitted); or
c. penalty under subsection 112 (3) of the ITA in relation to estimates raised under
subsection 90 (3) ITA [subsection 112 (3A) ITA]; or
d. prosecution under paragraph 120 (1) (i) of the ITA in relation by failing to inform the
DGIR about change of accounting period within the period specified in under subsection
21A (3A) of the ITA. For this purpose, Notice of Action Prosecution under
paragraph 120 (1) (i) of the ITA will be issued to taxpayers.

C4 - Basis Period

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C4 - Basis Period

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CHAPTER 4

DR ARYATI JULIANA SULAIMAN 2

DR ARYATI JULIANA SULAIMAN 3

DR ARYATI JULIANA SULAIMAN 4

DR ARYATI JULIANA SULAIMAN 5

DR ARYATI JULIANA SULAIMAN 6

DR ARYATI JULIANA SULAIMAN 7

DR ARYATI JULIANA SULAIMAN 8

DR ARYATI JULIANA SULAIMAN 9

DR ARYATI JULIANA SULAIMAN 10

Old Business New Business

DR ARYATI JULIANA SULAIMAN 11

DR ARYATI JULIANA SULAIMAN 12

DR ARYATI JULIANA SULAIMAN 13

DR ARYATI JULIANA SULAIMAN 14

01/04/2021 – 31/03/2022 (Normal accounting date)

01/01/2023 – 31/12/2023 (12 months)

Year of Assessment Basis Period Period

YA 2022 01/04/2021 – 31/03/2022 12 months (normal)

YA 2023 01/04/2022 – 31/12/2023 21 months

YA 2024 01/01/2024 – 31/12/2024 12 months

DR ARYATI JULIANA SULAIMAN 15

DR ARYATI JULIANA SULAIMAN 17

DR ARYATI JULIANA SULAIMAN 19

DR ARYATI JULIANA SULAIMAN 20

DR ARYATI JULIANA SULAIMAN 21

DR ARYATI JULIANA SULAIMAN 22

DR ARYATI JULIANA SULAIMAN 23

DR ARYATI JULIANA SULAIMAN 24

DR ARYATI JULIANA SULAIMAN 25

DR ARYATI JULIANA SULAIMAN 26

DR ARYATI JULIANA SULAIMAN 27

DR ARYATI JULIANA SULAIMAN 28

DR ARYATI JULIANA SULAIMAN 29

DR ARYATI JULIANA SULAIMAN 30

DR ARYATI JULIANA SULAIMAN 31

DR ARYATI JULIANA SULAIMAN 32

DR ARYATI JULIANA SULAIMAN 33

DR ARYATI JULIANA SULAIMAN 34

DR ARYATI JULIANA SULAIMAN 35

DR ARYATI JULIANA SULAIMAN 36

DR ARYATI JULIANA SULAIMAN 37

DR ARYATI JULIANA SULAIMAN 38

DR ARYATI JULIANA SULAIMAN 39

DR ARYATI JULIANA SULAIMAN 40

DR ARYATI JULIANA SULAIMAN 41

DR ARYATI JULIANA SULAIMAN 42

DR ARYATI JULIANA SULAIMAN 43

DR ARYATI JULIANA SULAIMAN 44

DR ARYATI JULIANA SULAIMAN 45

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