KUALA LUMPUR, Nov 11 — Failing to pay CP500 tax instalments will not result in an overseas travel ban for taxpayers, as the notice does not constitute a final tax assessment, Parliament was told today.
Deputy Finance Minister Liew Chin Tong told the Dewan Rakyat that a taxpayer’s actual tax liability can only be determined once the Income Tax Return Form (better known in Malay as Borang Nyata Cukai Pendapatan or BNCP for short) is submitted for the relevant assessment year.
“Failure to settle CP500 instalments does not result in taxpayers being subjected to an overseas travel ban, as CP500 is not a final tax assessment,” Liew said during Question Time.
“Based on the BNCP submitted, the actual amount of tax payable will be recalculated by deducting any CP500 instalment payments that have been made,” he added, citing official tax provisions.
A CP500 form is an official Instalment Payment Notice issued to non-salaried or self-employed earners.
If a balance remains after this recalculation and the taxpayer fails to settle it within the stipulated deadline, only then will it be classified as an outstanding tax debt, Liew said.
Under Malaysian law, travel restrictions are enforced by the Inland Revenue Board in cooperation with the Immigration Department against individuals or company directors specifically for outstanding tax arrears.
A travel ban will be triggered if there is a violation of Section 104 of the Income Tax Act 1967 and Section 22 of the Real Property Gains Tax Act 1976.
Because the CP500 schedule serves as an estimated payment scheme rather than a final tax liability, non-payment of the instalments alone does not trigger blacklisting at immigration checkpoints, Liew said.
