KUALA LUMPUR: Some 200,000 taxpayers have been issued Instalment Payment Notices (CP500) by the Inland Revenue Board (LHDN), involving an estimated RM1.11bil in tax payments, says the Finance Ministry.
The CP500 is a tax instalment notice issued to individuals with non-employment income such as business, rental and royalty earnings.
"The government acknowledges that a number of taxpayers who only earn employment income also received the CP500 owing to inaccurate reporting in their tax returns, where part of their employment income was mistakenly declared as non-employment income," the ministry said in a parliamentary written reply dated Tuesday (Feb 24).
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"LHDN is taking steps to cancel these notices, and affected taxpayers can submit an amendment application (CP502) together with their EA/EC form to the CP500 Help Desk via mejabantuanCP500@hasil.gov.my.
"In a move to ease compliance, the government has announced that no penalties will be imposed for non-payment of CP500 instalments this year.
"Taxpayers are also advised to update their income reporting in their 2025 income tax return form (BNCP) to avoid receiving CP500 notices in future," it added.
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The ministry said the move aims to support taxpayers while ensuring accurate reporting and fair tax collection.
On Jan 5, Prime Minister Datuk Seri Anwar Ibrahim announced a penalty-free period throughout 2026 for unintentional errors in taxpayers' CP500 filings.
Lim Guan Eng (PH-Bagan) wanted to know the basis for issuing the CP500 instalment payment form, the number of taxpayers involved, the estimated amount to be collected, and whether or nbot CP500 notices can be withdrawn in case of error – for example, when taxpayers are required to make prepayments for rental income even though they did not receive any proceeds.
