Your Tax Obligation As An Employer

October 4, 2019

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.

Employer Tax Forms

Types of Form	Explanation
Form CP 600E	Employer Income Tax File Registration Form
Form E	Employer Form Under Section 83(1) Director General may by statutory order require every employer to prepare and deliver for any year specified in the order and within a time so specified a return in the prescribed from containing:- The names and places of residence of such classes of persons employed by the employer as may be indicated in the order; and The full amount of gross income falling within s.13 of Income Tax Act paid, payable or provided by or on behalf of the employer to those persons in respect of their employment.
Form CP8D	An attachment to employer form with details of employees’ remuneration and monthly tax deduction paid
Form CP 600B	Notification Change of Address
Form CP58	Statement of monetary and non-monetary incentive payment to an agent, dealer or distributor For the purposes of s.83(6) of the Income Tax Act and subsection 107(4), any person to whom or for whose benefit a service is rendered or performed by another personal shall be deemed to be an employer whether or not he employs that other person or is responsible for paying remuneration to that other person.
Form CP57	Notification of the demise of taxpayer
Form CP22	Notification of new employee Under Section 83(2) of the Income Tax Act Where an employer commences to employ an individual who is or is likely to be chargeable to tax in respect of income in respect of gains or profits from the employment, the employer shall not later than one month thereafter give written notice to the Director General stating the full name and address of the individual and the terms and date of commencement of the employment. Checklist on employee details (submit within 1 month from Date of Commencement) Full name Nature of employment Commencement date Expected duration for employment Residential address and correspondence address Income tax number (if applicable) IC/passport/immigration number Date of birth, marital status and number of children Spouse details (Full name, IC/passport) and Tax reference number Monthly rate of fixed remuneration Allowance details Emoluments details (if applicable) Precious employer details
Form CP 22A	Tax clearance form for cessation of employment of private sector employees under s.83(3) of the Income Tax Act Where an employer is about to cease to employ an individual who is or is likely to be chargeable to tax in respect of income in respect of gains or profits from the employment, the employer shall not less than one month before the cessation give written notice thereof to the Director General stating the full name and address of the individual and the expected date of cessation.Provided further that an employer shall not be required to give the written notice under this subsection in respect of an individual:- Where the income from the employment of that individual is subject to deduction under any rules made pursuant to paragraph 154(1)(a); or Where the total monthly remuneration from the employment of that individual is below the minimum amount of income that is subject to deduction under any rules made pursuant to paragraph 154(1)(a), and where is known to him that the individual is not retiring from any employment. Check list on employee details (submit at least 30 days before the date the employee ceases employment) To submit if: Employee is about to retire Employee is subject to Monthly Tax Deduction (MTD)/PCB but never made any deduction Employer must withhold money payable to employee until receive Clearance Letter from Inland Revenue Board Not required to withhold if:- Employee is subject to MTD/PCB and deduction has been made by employer Employee remuneration is less than minimum income subject to MTD/PCB Employer is aware that the employee is to be employed elsewhere in Malaysia Details of employee Start date and end date Allowances, benefit-in-kinds, value of living accommodation of employee
Form CP 22B	Tax clearance form for cessation of employment of public sector employees
Form CP 21	Notification by employer of departure from country Under s.83(4) of the Income Tax Act In respect of gains or profits from an employment is to the knowledge of his employer about to leave or intending to leave Malaysia for a period exceeding three months, the employer shall not less than one month before the expected date if departure give written notice of the individual’s departure to the Director General: Provided that:- Where he is satisfied that it is reasonable to do so in the circumstances, the Director General may accept for the purposes of this subsection a notice given less than one month before the departure or a notice given on or after the departure; and Where is satisfied that an individual is required to leave Malaysia at frequent intervals in the course of his employment, the Director general may waive the application of this subjection as regards that individual. s.83(5) of the Income Tax Act Notwithstanding the provisions of any written law to the contrary, where an employer has in his possession any money whatsoever which are or may be payable to or for the benefit of an employee who has ceased or is about to cease to be employed by him or who is about to leave Malaysia for a period of more than three months with no intention of returning, he shall not, without the permission of Director General, pay any part of those moneys to or for the benefit of the employee until ninety days after the receipt by the Director General directs him o pay the full amount or a portion of those moneys towards payment of the tax payable by the employee, he shall pay as directed.
Form EA	Statement of remuneration – private
Form EC	Statement of remuneration – public
PCB 2(II)	Employer’s statement on payment of tax
Form CP 39	Statement of Monthly Tax Deduction (MTD)
Form TP 1	Monthly tax deduction form regarding claim of deduction and rebate by individual
Form TP 3	Form of information related employment with previous employer

If you need assistance on Employer Tax Obligation Review and Audit, or Business Process Outsource Services, please call us at 011-1217 8183.

Your Tax Obligation As An Employer

Employer Tax Obligation under Income Tax Act

Employer Tax Forms

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