Employer Tax Obligation under Income Tax Act
As an employer in Malaysia, there are a couple of employer tax obligation that you have to comply with:-
- Firstly, companies are required to furnish a statement of remuneration, also known as the Form EA, to their employees by February each year. This allows the employees to report their taxes accordingly.
- Secondly, by March every year, you have to submit a summary of earnings to the tax authority using what’s called the Form E and Form CP8D.
- Third, whenever there is a new employee (which is likely to be taxed) joins your company, you are required to notify the tax authority via a notification Form CP22.
- Fourth, if your employee (which is likely to be taxed) is leaving the company due to retirement, you are also required to inform the tax authority of your employee’s departure from the company via a notification Form CP22A.
- Fifth, if you are hiring a a foreign employee or expatriate, prior to them leaving the company, it is the Company’s obligation to prepare a tax clearance form, also known as the Form CP21.
- Finally, each and every month, companies are required to deduct an amount of tax from the employee’s remuneration and submit to the tax authority. The monthly tax deduction is also known as monthly tax deduction.