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Tax filing for YA2001 (current year basis) (self-assessment)

All companies are on self-assessment basis with effect from year of assessment 2001. Many companies year of assessment 2001 begins in year 2000 and not 2001. The 1^st batch of companies preparing for self-assessment are those with years ending 31 January, 28 February and 31 March 2001.  IRB will issue the prescribed form (Form CP 204) as early as January 2000!

Estimates of income tax payable:

Every company is required to furnish an estimate of income tax payable for the year of assessment 2001 (current year basis) in a “prescribed form” not later than 30 days before the beginning  of the basis period. [Section 12 of the Income Tax (Amendment) (No 2) Bill 1999]. Section 17 of the Amendment (No 2) Bill further provides that the estimate of tax payable for the year of assessment 2001 must not be less than the income tax payable for the year of assessment 1999 (preceding year basis).

IRB allows companies to revise the estimates of income tax payable in the 6^th month of the basis period for a year of assessment. The tax payable for the remaining months shall be revised upwards or downwards accordingly.

Below is a table to show the issue of the prescribed form (Form CP 204), the submission of the estimates and the revision period allowed:

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Payment of tax instalment for year of assessment 2001 (current year basis)(self assessment):

Companies with year ending 31 January 2001 will receive the notice of instalment payment (Form CP 205) before March 2000. The 1^st monthly instalments would be payable on or before 10 March 2000. The submission of Form CP 204 woul dbe given a concession by IRB to be submitted in either January 2000 or early February 2000.

Every company is required to pay the tax in equal 1 monthly instalments. In the event that companies do not have a 12 months accounts for the year of assessment 2001, then the estimated tax payable for that year will ten be divided by the number of months for that year of assessment. The monthly instalment will due on the 10^th of every month commencing from the 2^nd month of the basis period.

Penalties on underestimates of income tax payable:

Every company is given one opportunity to revise its tax estimate, i.e., in the 6^th month of the basis period. A 10% penalty will be imposed on the excess of 30% difference between the original estimate or revise estimate and the actual tax payable upon the submission of the income tax return.

Deemed Notice of assessments:

Under Section 90(1A) of the Income Tax Amendment (No 2) Bill 1999, the DGIR is deemed to have made an assessment in the amount of tax on the chargeable income shown by the return on the day the return is submitted to the assessment branch. This is called self-assessment.

Under Section 90(1B) of the Income Tax Amendment (No 2) Bill 1999, the income tax return submitted is deemed to be a notice of assessment. This means that the IRB would no longer issue Form J to a company for the year of assessment 2001 (current year) or any subsequent year.

Payment of the balance of tax:

The difference between the income tax payable as per the submission of tax computation and the instalment plan is due and payable on the last day of the 6^th month following the close of the financial year end. The balance of the tax instalments must be settled within 30 days from such date. This is to avoid paying a penalty of 10% plus 5%. The time period for the balance of instalment payments are as follows:

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