CP500 is LHDN’s bimonthly tax instalment notice for individuals earning non-employment income — including rental income, royalties, and business profits. In 2026, the Inland Revenue Board of Malaysia (LHDN / IRBM) has waived penalties for non-payment for Year of Assessment (YA) 2026, but the tax liability itself remains. Payments fall across six bimonthly dates: March, May, July, September, November, and January.
Received a CP500 notice from LHDN and not sure what to do? You are not alone. CP500 is the Inland Revenue Board of Malaysia’s (LHDN / IRBM) official bimonthly tax instalment notice for individuals who earn income outside of regular employment. In 2026, LHDN has introduced a penalty waiver for non-payment — but this does not mean the tax disappears. This guide explains exactly what CP500 is, who gets it, when payments are due, and what the 2026 waiver really means for you.
What Is CP500 in Malaysia?
CP500 is a bimonthly advance tax instalment notice issued by the Inland Revenue Board of Malaysia (LHDN, also known as IRBM — Inland Revenue Board of Malaysia). It requires certain individual taxpayers to make advance payments toward their estimated income tax liability, spread across six instalments per year.
Unlike PCB (Potongan Cukai Bulanan) — which is automatically deducted from an employee’s salary each month — CP500 is a self-managed payment that the taxpayer must initiate manually. LHDN calculates the estimated instalment amount based on the taxpayer’s previous year’s non-employment income and issues the CP500 notice accordingly.
CP500 is an advance estimate, not the final tax amount. When you file your Income Tax Return Form (BNCP) for the year, your actual tax liability is calculated. Any CP500 payments made are credited against that amount. If you overpay, LHDN refunds the difference. If you underpay, you settle the balance at filing.
For official details, refer to the LHDN official website (hasil.gov.my).
Who Receives a CP500 Notice?
LHDN issues CP500 notices to individuals who earn non-employment income. This includes:
- Landlords earning rental income from residential or commercial property
- Freelancers and self-employed individuals with business income not subject to PCB deduction
- Individuals earning royalties — such as authors, content creators, or intellectual property holders
- Business owners whose business income is assessed under personal tax (sole proprietors, partnerships)
- Mixed-income individuals who earn both a salary (with PCB deducted by their employer) AND non-employment income such as rental
LHDN began enforcing CP500 more broadly in late 2025, particularly for landlords who previously were not required to pay instalments. This is why many rental income earners received their first-ever CP500 notice at the start of 2026 — which is also why LHDN introduced the 2026 penalty waiver to ease the transition.
CP500 Payment Schedule 2026 — 6 Bimonthly Dates
CP500 payments fall across six bimonthly instalments per year. For Year of Assessment (YA) 2026, the payment dates are:
| Instalment | Due Date | Status (YA2026) |
|---|---|---|
| 1st — March | 31 March 2026 | ⚡ Active now — penalty waived |
| 2nd — May | 31 May 2026 | Penalty waived |
| 3rd — July | 31 July 2026 | Penalty waived |
| 4th — September | 30 September 2026 | Penalty waived |
| 5th — November | 30 November 2026 | Penalty waived |
| 6th — January | 31 January 2027 | Penalty waived (YA2026 instalment) |
Each instalment is due within 30 days of the date shown on your CP500 notice. Under normal circumstances, a 10% late payment penalty applies to any instalment not paid by the due date. For YA2026, that penalty has been suspended — see the next section for details.
Payment methods: Instalments can be paid through the MyTax portal , online banking, or Interbank GIRO (IBG). Keep your payment receipt as proof.
Is the 2026 CP500 Penalty Really Waived?
Yes — but with an important caveat. In January 2026, LHDN officially announced that individual taxpayers who receive CP500 notices will not be penalised for non-payment for Year of Assessment (YA) 2026. The waiver covers all six bimonthly instalments for YA2026.
The reason for the waiver is transitional relief. LHDN expanded CP500 coverage to include more categories of non-employment income — particularly landlords — who were not previously required to make advance tax payments. Many of these taxpayers received their first-ever CP500 notice in early 2026 and needed time to understand the system.
In short: skipping your 2026 CP500 instalments is a short-term relief with a potential long-term cash flow consequence. If your rental or freelance income is significant, making voluntary payments now may be the more financially prudent choice.
The penalty waiver was confirmed via LHDN’s official announcement in January 2026, as reported by The Edge Malaysia and Malay Mail.
CP500 vs PCB: What Is the Difference?
CP500 and PCB (Potongan Cukai Bulanan) are both mechanisms for advance income tax payment in Malaysia, but they serve different purposes and apply to different income types.
| Feature | PCB (Monthly Tax Deduction) | CP500 (Bimonthly Instalment) |
|---|---|---|
| What income does it cover? | Employment income (salary, bonus, allowances) | Non-employment income (rental, royalties, business profits) |
| Who initiates payment? | Employer (automatic deduction from salary) | Taxpayer (manual payment required) |
| Frequency | Monthly (12 payments/year) | Bimonthly (6 payments/year) |
| Who receives a notice? | No notice — handled by employer | Taxpayer receives CP500 form from LHDN |
| Can you amend the amount? | Via employer’s monthly payroll system | Yes — via CP502 form (deadlines: 30 Jun & 31 Oct 2026) |
| 2026 penalty waiver | N/A | Yes — penalties waived for YA2026 |
| Best for | Salaried employees | Landlords, freelancers, self-employed, mixed-income earners |
For a detailed breakdown of how PCB and CP500 interact — especially for mixed-income individuals who receive both — read our full comparison guide: PCB vs CP500 Malaysia 2026.
Related Guides: Checking Your Amount and Applying to Amend
If your non-employment income has changed significantly from the previous year — for example, you sold a property, started a new rental, or stopped freelancing — you can apply to revise your CP500 instalment amount using Form CP502.
The amendment deadlines for YA2026 are:
- First revision: Submit CP502 by 30 June 2026
- Second revision: Submit CP502 by 31 October 2026
Two related step-by-step guides are in preparation:
- How to check your CP500 instalment amount in MyTax — a walkthrough of the MyTax portal to view your current CP500 notice and instalment amounts
- How to apply to amend your CP500 amount using CP502 — a step-by-step guide to submitting a revision if your income has changed
These guides will be linked here once published. In the meantime, you can access your CP500 notice directly through the MyTax portal.
How JomeInvoice Helps Mixed-Income Business Owners
If you run a business and earn income from multiple sources — a salary, rental income from a property you own, and revenue from your company — you are likely navigating both CP500 instalments and LHDN’s e-invoice compliance requirements simultaneously.
As of January 2026, businesses with annual revenue between RM1 million and RM5 million are required to issue LHDN-compliant e-invoices for every business transaction under Phase 4 of the e-invoice mandate. Managing advance tax payments while simultaneously setting up e-invoice compliance can feel overwhelming, especially for owner-operated SMEs.
JomeInvoice is Malaysia’s LHDN-compliant e-invoicing middleware that connects your existing business system — whether that is an accounting platform, POS, or e-commerce store — directly to LHDN’s MyInvois portal, without custom development.
For business owners affected by both CP500 and Phase 4 e-invoice requirements, JomeInvoice handles the technical compliance layer so your team can focus on running the business rather than managing compliance infrastructure. Key capabilities relevant to SMEs:
- System-agnostic integration — works with existing accounting software (no need to replace AutoCount, SQL, or Xero)
- Auto TIN verification — LHDN Tax Identification Number lookup is built in
- Real-time compliance dashboard — monitor every validated e-invoice in one place
- ISO 9001, ISO 20001, ISO 27001 certified — enterprise-grade security and quality
- Local Malaysian team — deep LHDN knowledge, local support
Ready to get your e-invoice compliance sorted before the Phase 4 enforcement deadline in January 2027?
Book a free demo and see how it works for your specific system.
Frequently Asked Questions — CP500 Malaysia 2026
What is CP500 in Malaysia?
CP500 is LHDN’s (Inland Revenue Board of Malaysia) bimonthly advance tax instalment notice issued to individuals with non-employment income — such as rental income, royalties, or business profits. It requires six payments per year, due in March, May, July, September, November, and January.
When is CP500 due in 2026?
CP500 instalments for YA2026 are due on 31 March, 31 May, 31 July, 30 September, 30 November, and 31 January 2027. Each instalment must be paid within 30 days of the due date shown on the notice.
Is the CP500 penalty waived in 2026?
Yes. LHDN officially waived penalties for non-payment of CP500 instalments for Year of Assessment (YA) 2026. However, the underlying tax liability still exists — unpaid instalments become a larger lump sum when you file your income tax return in 2027. Voluntary payment is encouraged.
Who has to pay CP500 — employed or self-employed?
CP500 applies to individuals with non-employment income: landlords, freelancers, sole proprietors, and mixed-income earners (salary plus rental or business income). Salaried employees whose only income is covered by PCB deduction do not receive CP500.
What happens if I ignore my CP500 notice?
In 2026, you will not be penalised for ignoring CP500 instalments due to the penalty waiver. However, the tax you owe for YA2026 still accumulates and must be settled when you file your BNCP (income tax return). Missing voluntary payments creates a larger tax bill at filing.
Do I still need to pay CP500 if the penalty is waived?
You are not legally required to pay CP500 instalments in 2026 without facing a penalty, but LHDN strongly encourages voluntary payment. Skipping instalments means paying the full year’s non-employment income tax as a single lump sum when you file your return in 2027.
How do I amend my CP500 instalment amount?
Use Form CP502 to apply for a revision. For YA2026, the first revision deadline is 30 June 2026 and the second is 31 October 2026. Submit via the MyTax portal at mytax.hasil.gov.my. Use this if your income has changed significantly from the previous year.
Disclaimer: This article covers general information about CP500 and is intended for educational purposes only. It does not constitute tax advice. Tax laws and LHDN guidelines are subject to change. Always consult a qualified tax professional for advice specific to your situation, and refer to the official LHDN website at hasil.gov.my for the latest requirements.
Last updated: March 2026
