CP204 is your company's tax estimate. Every year, you tell LHDN how much tax you expect to pay. Then you pay it in equal amounts each month. If your estimate is too low, you may pay a penalty.
This guide explains it in simple steps: who must file, when it is due, how monthly payments work, how to change your estimate, and how to avoid the 10% penalty.
Key Takeaways
- Companies, LLPs, trusts and cooperatives must file CP204 every year.
- Existing company: file at least 30 days before your financial year starts. New company: file within 3 months after you start business.
- Pay one instalment every month, on or before the 15th.
- You can change your estimate in month 6, 9 or 11 with Form CP204A.
- If your real tax is more than 30% above your estimate, you pay a 10% penalty on the extra. Paying late also means a 10% penalty.
- Dormant companies, or companies that have not started business, do not need to file.
What Is CP204?
CP204 is a form that tells LHDN how much tax your company expects to pay for the year. You do not wait until the end of the year. You pay in advance, a little every month.
It is for companies, LLPs, trusts and cooperatives. You file it online through e-Filing with a digital certificate. Most companies ask their company secretary or tax agent to do it.
Dormant companies, and companies that have not started business, do not need to file. Once you start business, tell your tax agent the start date.
If you should file but do not, LHDN can set an estimate for you. You may also be prosecuted, with a fine of RM200 to RM20,000, up to 6 months in jail, or both.
When Is CP204 Due?
| Company type | When to file | First payment |
|---|---|---|
| Existing company | At least 30 days before your financial year starts | Month 2 of your financial year |
| New company | Within 3 months after you start business | Month 6 of your financial year |
Example: your financial year is 1 January to 31 December 2027. File by 1 December 2026. Your first payment is on 15 February 2027, and your last is on 15 January 2028.
A new company follows the 30-day rule from its second year. From then on, your estimate also cannot be lower than 85% of last year's estimate.
Your financial year ends on another date? Check the schedule on the LHDN CP204 page.
How Do the Monthly Payments Work?
LHDN splits your estimate into equal payments, one for each month of your financial year. Each payment is due on the 15th.
Example: your estimate is RM96,000 for 12 months. You pay RM8,000 every month.
Pay late? LHDN adds a 10% penalty on the unpaid amount for that month.
After LHDN works out your real tax, you pay any balance within 7 months after your year-end. This is the same deadline as Form C.
How to Change Your Estimate
Business can go up or down during the year. You can change your estimate with Form CP204A in month 6, month 9, month 11, or all three.
| Change in | New amount starts from |
|---|---|
| Month 6 | 5th or 6th payment |
| Month 9 | 8th or 9th payment |
| Month 11 | 11th payment |
Example: you estimated RM96,000 (RM8,000 a month) and have paid 5 times (RM40,000). In month 6, you raise the estimate to RM180,000. The balance is RM140,000. Divide by the 7 payments left, so you pay RM20,000 each time.
If you lower your estimate and you have already paid enough, the remaining payments stop.
The 30% Rule and the 10% Penalty
At year-end, LHDN compares your real tax with your latest estimate. If your estimate is too low by more than 30% of the real tax, you pay a 10% penalty on the part above 30%.
Formula: penalty = [(real tax − estimate) − (30% × real tax)] × 10%
Example: real tax is RM200,000 and your estimate was RM120,000. The gap is RM80,000. The allowed gap (30%) is RM60,000. The extra is RM20,000, so the penalty is RM2,000. If your estimate was RM150,000, the gap is RM50,000. That is below RM60,000, so there is no penalty.
How to stay safe: check your numbers in month 6, 9 and 11. If profit is higher than planned, change your estimate.
Do not agree with a late-payment penalty? Appeal in writing to your LHDN branch (Collections Unit) within 30 days of the statement of account. You must still pay while you wait.
Budget 2027 proposes lower SME tax rates. Read more in our guide: Budget 2027 SME tax rate. It is only a proposal until Parliament passes the law, so ask your tax agent which rate to use.
CP204 Checklist
- Write down your financial year start date. File CP204 at least 30 days before it.
- Check last year's estimate. This year's cannot be below 85% of it.
- Divide the estimate by the number of months. Set a reminder before the 15th each month.
- Check your numbers in month 6, 9 and 11. Change the estimate if real tax may be 30% higher.
- Keep your CP204 and CP204A confirmations and payment records for at least 7 years.
Conclusion
CP204 is not just a form you file once a year. It decides how much cash leaves your business every month, and whether you pay a penalty at year-end. Make a realistic estimate, pay by the 15th, and check your numbers in month 6, 9 and 11. Next, read our guide to Form C.
Official Sources
Last updated: 11 November 2026. This article is general information, not tax advice. Rules can change, so check with LHDN or a tax agent before you file.
Frequently Asked Questions
If your financial year starts on 1 January, file by 1 December of the year before. For YA2027, that is 1 December 2026. Your first payment is then due on 15 February 2027.
Yes. Submit Form CP204A in month 6, 9 or 11 of your financial year, or in all three. The new amount starts from the payment shown in LHDN's schedule for that month.
No. LHDN says dormant companies, and companies that have not started business, do not need to file. When the company starts to operate, the rule applies.
If your real tax is more than 30% above your latest estimate, LHDN charges a 10% penalty on the extra. Changing your estimate in month 6, 9 or 11 helps you avoid it.
CP204 Malaysia: Simple Guide to Tax Estimate, Deadline and Penalty