Eight Key Changes in the Revised Quarterly Tax Circular

Key Changes Taxpayers Need to Know

The Inland Revenue Department (IRD) has issued revised Circular No. SEC/2026/E/06, dated 6 August 2026, relating to the calculation and payment of quarterly income tax instalments.

The revised circular amends the original circular issued on 3 August 2026 and applies to the Year of Assessment 2026/2027 and subsequent years of assessment.

Taxpayers and tax practitioners should therefore follow the revised circular dated 6 August 2026 when calculating and paying quarterly income tax instalments.

Quarterly Instalment Due Dates

Under Section 90 of the Inland Revenue Act, No. 24 of 2017, as amended, instalment payers are required to pay quarterly income tax instalments on or before the following dates:

• First instalment: 15 August
• Second instalment: 15 November
• Third instalment: 15 February
• Fourth instalment: 15 May of the succeeding year

The quarterly instalment is generally calculated using the following formula:

Quarterly instalment = (A – C) ÷ B

Where:

• A is the amount of tax payable on the taxable income of the immediately preceding year of assessment, before deducting tax credits.
• B is the number of instalments remaining for the year of assessment, including the current instalment.
• C is the total tax paid during the current year of assessment before the due date of the relevant instalment. This includes previous instalment payments and WHT/AIT credits already withheld or expected to be withheld.

Key Changes Introduced by the Revised Circular

1. Deadline for Submitting Attachments

The original circular generally required the relevant statements, forms and attachments to be submitted before 31 July, with additional time allowed until 15 August 2026 for the Y/A 2026/2027.

Under the revised circular, attachments required under the circular must be submitted on or before 15 August of the year in which the first income tax instalment becomes due.

The attachments may be submitted to:

• Central Document Management Unit (CDMU)
• Relevant Metro Office
• Relevant Regional Office

This is one of the most important administrative changes introduced by the revised circular.

2. Specific Deadlines for Credit Schedules

The revised circular introduces clear deadlines for submitting the credit schedule relating to component “C” of the formula.

The credit schedule must be submitted on or before the last day of the relevant instalment month:

• 31 August
• 30 November
• 28 or 29 February
• 31 May

The credit schedule should be submitted to the CDMU, relevant Regional Office or Metro Office.

3. Change in the Treatment of Foreign Tax Credits

The original circular expressly included entitled foreign tax credits within component “C” of the quarterly instalment formula.

This reference has been removed from the definition of component “C” in the revised circular.

However, the separate provision on foreign tax credits remains. Accordingly, when estimating the tax payable under component “A,” a taxpayer may consider a foreign tax credit available under Section 80 of the Inland Revenue Act.

The relevant foreign income tax must have already been paid or be reasonably expected to be paid during the year.

Therefore, the revised circular does not expressly treat foreign tax credits as part of component “C,” but permits them to be considered when estimating the tax payable under component “A.”

4. Correct Attachment for Taxpayers Expecting Lower Income

Where a taxpayer had assessable income in the previous year but reasonably expects a significant reduction in the current year, the original circular referred to the submission of Attachment 2.

The revised circular corrects this reference to Attachment 1.

Accordingly, taxpayers seeking to calculate their instalments on the basis of lower expected income must submit Attachment 1 together with supporting details and calculations.

5. Declaration When No Taxable Income Is Expected

The revised circular introduces an additional requirement for taxpayers expecting no taxable income during the current year because of:

• Tax losses;
• Qualifying payments; or
• Other allowable deductions.

Such taxpayers must declare their expected losses or deductions under paragraph 8.2 of Attachment 1.

Attachment 1 has also been revised to capture estimated losses and deductions, including qualifying payments.

6. Changes to Method 3 for Taxpayers Unable to Estimate

Method 3 applies where a taxpayer is practically unable to calculate component “A” under the relevant alternative methods due to unusual circumstances.

Under the revised circular, such a taxpayer must submit a written request explaining the valid restrictions preventing the calculation.

The request should be addressed to the Commissioner – Tax Policy and Legislation Unit, on behalf of the Commissioner General, seeking another reasonable alternative method.

The revised circular removes the previous wording that expressly referred to authorisation to use the estimation method applicable to newly registered taxpayers.

7. Further Clarification on APIT and AIT Credits

The revised circular provides further clarification regarding APIT and AIT credits when determining whether a quarterly instalment is payable.

Accordingly:

• An individual deriving only employment income subject to APIT is not required to make quarterly instalment payments.
• Such an individual is also not required to submit a credit schedule.
• If an individual receives employment income together with rent or interest income subject to AIT, and the available APIT and AIT credits are sufficient to cover the remaining income tax liability, quarterly instalment payments and the credit schedule are not required.

The revised circular also introduces a new Example 6 to illustrate a situation in which the available APIT and AIT credits fully cover the calculated tax liability.

This clarification applies to employees whose APIT is calculated and paid using APIT Table 8.

8. Specific Deadlines for Mid-Year Revisions

A taxpayer who initially pays quarterly instalments under Method 1 – the Standard Basis – may subsequently expect the taxable income for the current year to be lower than that of the preceding year.

The revised circular permits the taxpayer to revise the basis of calculation by submitting the relevant information on or before:

• 31 October – before the second instalment;
• 31 January – before the third instalment; or
• 30 April – before the fourth instalment.

The request must be submitted to the CDMU together with supporting information by the applicable deadline.

The taxpayer may then apply Method 2 or Method 3, as appropriate.

What Should Taxpayers Do?

Taxpayers should take the following actions:

1. Follow the revised Circular No. SEC/2026/E/06 dated 6 August 2026, which amends the original circular dated 3 August 2026.
2. Calculate quarterly instalments using the applicable standard or alternative method.
3. Submit Attachment 1 when calculating instalments based on lower expected income, losses or allowable deductions.
4. Submit Attachment 2 if the taxpayer is newly registered and does not have a preceding-year tax computation.
5. Submit the required attachments on or before 15 August.
6. Submit credit schedules within the specified quarterly deadlines.
7. Retain supporting calculations and information relating to any expected reduction in income.
8. Carefully review the treatment of foreign tax credits when calculating component “A” and component “C.”
9. Observe the specific deadlines if requesting a mid-year revision to the calculation basis.

Conclusion

The revised circular introduces important changes to submission deadlines, credit schedules, foreign tax credits, lower-income declarations, APIT/AIT credits and mid-year revisions.

Although the main quarterly instalment formula remains unchanged, these revised procedures can directly affect how taxpayers calculate, document and submit their quarterly income tax instalment positions.

Taxpayers should carefully review revised Circular No. SEC/2026/E/06 dated 6 August 2026 before calculating and paying their quarterly income tax instalments for the Y/A 2026/2027.

This article is provided for general informational purposes only. Taxpayers should consider their individual circumstances and obtain professional advice where necessary.

Revised Circular : Revised Circular No: SEC/2026/E/06 -06.08.2026 , Original Circular SEC/2026/E/06 -03.08.2026