Last time, I, as tax agent, can easily help a client set off their tax refund against next year’s CP204 instalments.

Today, things are different.

LHDN now rejects the application to set off tax credit. Worse, the refund drags on for months, even years. Meanwhile, your business still needs to pump in fresh cash to pay CP204 instalments.

In short, your cash is “taxed twice” – refund stuck, instalments still payable.

Why it happens?

1. Since March 2024, LHDN stopped automatic set-off.
2. Refunds now depend on government cash allocation, not your entitlement.

Impact on SMEs

1. Double funding stress – your cash locked with LHDN.
   2 .Business disruption – less cash for payroll, stock, or loan repayment.
2. Feels like over-taxation – your own money, but out of reach.

My Advice:

1. Plan CP204 carefully to avoid overpayment.
2. Use 6th/9th/11th month revisions to manage tax cash flow.
3. Engage LHDN early if your cash flow is critical.

Full details on this tax update, read in our KTP Blog.
https://lnkd.in/g94zyZsr