KUALA LUMPUR, Jan 5 — The Inland Revenue Board of Malaysia (LHDN) has announced that individual taxpayers who receive Instalment Payment Notices (CP500) will not be penalised for non-payment for the Year of Assessment (YA) 2026.

The decision follows the government's agreement to grant a transition period for taxpayers to adapt to CP500 requirements, particularly those who earn income from both employment and non-employment sources such as rent, interest, or royalties, it said in a statement.

During this period, while no penalties will be imposed, LHDN said it is encouraging taxpayers to make voluntary CP500 payments to reduce the burden of a large final tax payment when filing their Income Tax Return Form (BNCP).

LHDN also clarified that taxpayers who earn income solely from employment are not required to comply with CP500 instructions. 

To avoid receiving these notices in the future, such individuals are advised to ensure their income reporting in the BNCP for YA 2025 year is accurate and up-to-date. 

The agency will be contacting affected taxpayers to clarify any reporting errors from previous submissions.

For those who wish to amend their CP500 amount based on their estimated income for YA 2026, applications can be made using the CP502 Form (Application for Amendment of Instalment Payments). 

The deadlines for amendments are June 30 for the first revision and October 31 for the second.

The CP502 form and its explanatory notes are available for download on LHDN’s official portal.

For further enquiries, taxpayers can contact the LHDN Contact Centre at 03-8911 1000, use the LHDN Live Chat service, or submit feedback via the official portal. - malaymail