The recent CP500 instalment notices issued by the Inland Revenue Board (“IRB”) have raised questions among individual taxpayers, particularly those who earn both employment income and other sources of income.
The CP500 instalment payment system is not a new measure introduced by IRB. It has existed for many years and has traditionally applied to individual taxpayers who earn income outside of employment, such as business income, rental income, royalties, or other sources of income. In substance, CP500 serves a similar purpose to Monthly Tax Deduction for salaried employees. Both mechanisms are designed to collect tax progressively during the year in which income is earned, rather than waiting until the annual tax return is filed.
For Year of Assessment (“YA”) 2026, IRB has granted a transition period to allow taxpayers time to adjust to CP500 requirements without penalty. While penalties are waived, taxpayers are encouraged to make voluntary instalment payments to reduce any balance of tax payable when filing their annual income tax return.
Taxpayers who wish to revise their CP500 instalment amounts for YA 2026 may do so by submitting Form CP502:
• First revision deadline: 30 June 2026
• Second revision deadline: 31 October 2026
