Missed a CP500 Instalment? It Will Not Stop You From Travelling Overseas on Its Own

Many business owners worry that a missed CP500 instalment could get them stopped at the airport.

This week, the Deputy Finance Minister clarified this in the Dewan Rakyat.

So, what is CP500?

CP500 is LHDN's notice of tax instalments for people with income other than employment, such as business, rental and royalties. LHDN estimates the amount at the start of each year, payable in instalments.

According to the Deputy Finance Minister, CP500 is not a final tax assessment. Your actual tax is only worked out after you submit your income tax return form for that year, and the CP500 instalments you have paid are deducted from it.

So, can a missed CP500 instalment stop you from travelling?

No, not on its own. A travel restriction can only come after your actual tax has been finalised and a balance is still unpaid within the time allowed. Only then is it treated as outstanding tax.

He added that restrictions are generally only imposed after six months without payment, and where the taxpayer has not responded to LHDN.

Does that mean CP500 can be ignored?

Not really. LHDN says CP500 instalments must be paid within the timeframe, and any balance left after your return is filed is outstanding tax. If your income has changed, LHDN allows you to apply to revise your CP500 by 30 June or 31 October.

Before you travel, how do you check?

LHDN says you can check your stoppage order status through MyTax or the Immigration Department's travel status check. If there is a restriction, it can be lifted by paying in full, and LHDN also allows taxpayers who cannot pay in full to apply for a temporary release at the LHDN office handling their file.

From a business perspective, it may be worth checking your tax status a few weeks before any overseas trip, rather than at the airport.

If you would like help with tax planning and advisory, our Taxation Services team can assist. Feel free to WhatsApp us at 010-246 2151.