Self-assessment tax is not a kind of separated tax. It is a part of the income tax and a method of tax computation and pay income tax in advance.
The Inland Revenue Department requires you to pay estimated income tax based on your self-estimated taxable profit for the current financial year. For that, you have to calculate the estimated taxable profit of the company based on the past performance and experience of the company. It means that the Department of Inland Revenue collects your annual income tax in advance in four instalments. Therefore, your business should estimate the taxable profit in advance and required to pay the tax every quarter.
Quarterly income tax payments
The income tax liability computed based on your estimated taxable profit shall be paid every quarter before the 15th of the following month in equal instalment. In a way, this is an effective tax collection system for businesses, because the cash pressure may not take place at end of the year in bulk as the total annual tax liability has been paid in advance in instalments. Therefore, occurring penalties, red notices and various other non-compliance issues will not be arisen due to this system.
How to adjust over/under tax payments
Self-assessment tax payments could makeover under/over tax payments at the end of the financial period. In that case, if your final actual income tax payable amount is greater than the estimated tax liability, you have to pay the balance payable amount (underpayment) on or before the 30th of September as a final tax payment. However, if your actual final income tax payable amount is lower than the estimated tax liability, then, you can carry forward the excess tax payment (overpayment) to next year as a tax credit and deduct it from next year tax liability.