Hi, Good Morning!
Today, I am going to share something interesting which is CP500.
What is CP500?
Everytime when I received something from LHDN, my heart beats faster than usual. Do you feel the same as I do? LOLZ!
As an income earner in Malaysia, we cannot runaway from paying tax. Every year, we need to declare our incomes and expenses so that we know what is our taxable income. We need to pay income tax to the government based on the taxable amount.
Here is the chart that you may want to keep as record.
This is my very first year receiving my love letter, CP500 from LHDN.
What is CP500?
CP500 is what we call as Income Tax Installment. It is a notice of Prepayment of Income Tax by Instalment.
CP500 normally will be sent early of the year to those who are ‘selected’ where you have to pay your (estimated) tax on an installment basis.
Who are the people who will be receiving this CP500?
Normally CP500 is given to people who has an income but not from their fixed pay. For example, people who drive GrabCar, people who has extra income via house rental or car rental, people who are doing online business and anyone who has a source of income but not paying PCB monthly.
Since I am not working now and I am receiving my monthly bonus from Shaklee, so I have to pay for this Prepayment of Income Tax by Installment via CP500 Notice.
This is actually a form of initiative to help tax payer to pay for their tax on a bi-monthly basis instead of a whole lumpsum during the tax declaration period.
If case the income tax amount is lesser than the amount that you have paid under this installment period, government will refund back to you as usual.
How Does LHDN Decides on the Amount on CP500?
LHDN estimates the tax amount based on the income tax paid in previous year.
For example, I am paying my tax of RM6000 in Year 2018. So LHDN will issue CP500 with an estimated tax of RM5000 and divide them into 6 months.
I have to pay my CP500 of RM1000 every bi-monthly starting March 2019 until January 2020.
How to Pay your CP500?
You can pay at most of the banks in Malaysia over the counter for CIMB Bank, Public Bank, Malybank, Affin Bank, Bank Rakyat, RHB Bank and BSN. You can also pay via online transfer using CIMB, PBB, Maybank2u, HLB, RHB, Vitibank, Alliance Bank and BSN.
You can choose to pay via LHDNM website at http://www.hasil.gov.my using FPX method.
If you prefer to walk in to LHDNM, you can choose to pay using cheque, bank draft to Ketua Pengarah Hasil Dalam Negeri.
If you choose to pay via CP501 Form, make sure you fill your details properly on the form which is attached together in the CP500 Notice and send to Pos Malaysia Berhad. The details and address is included together in the CP500 Notice.
Penalty for Late Payment
YES! There is always a penalty is you fail to pay on the “Tarikh Akhir Kena Bayar”, last date to pay. A penalty of 10% up to 100% will be imposed for late payer. So make sure you set your alarm every 2 months to pay for your CP500. Hehe.
So, don’t worry!
The government is not collecting extra money from you. It is just a system for you to pay your tax in advance via their installment program. It is common among those who are working with a company because they have to pay for their PCB (Monthly Tax Deduction) every month as stipulated in their payslip. It is a series of monthly deductions that go towards payment of your taxes in relation to your employment income. These monthly deductions are retained by your employer and paid over to the Inland Revenue Board (LHDN).
Hope this article helps those in doubt of CP500.
If you wish to know more about Shaklee business or Shaklee supplements, don’t forget to drop me a message via Whatsapp.
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