Tax Responsibility of Employer

Overview

As an employer, are you aware of the responsibilities and deadlines you have to adhere to? To make sure that you do not miss the deadline, here is the summary to help you.

Key takeaways:

You will understand the responsibility and consequences as follows: --

1. Who is the employer?

2. What are the employer’s responsibilities?

3. What are the consequences of failing to comply?

Summary of learning

1. Who is the employer?

- The employer has included Company, Limited Liability Partnership, Partnership, Enterprise and etc.

2. What are the employer’s responsibilities?

a) Register an Employer’s number (E)

The E number can be registered through https://edaftar.hasil.gov.my/.

b) Monthly Tax Deduction (MTD)

The MTD must be calculated based on the employee’s monthly remuneration and remitted to IRBM on or before the 15th of the subsequent month.

c) Employee’s Statement of Remuneration (Form EA)

Form EA has to be prepared and provided to employees on or before the last day of February of the following year.

d) Return Form of Employer (Form E)

Complete and submit the Form E with C.P.8D on or before 31 March of the following year via e-Filing.

e) Notification of New Employee (CP22)

To notify IRBM who is or is likely to be chargeable to tax within 30days after commencement of employment and submitted to any IRBM office.

f) Notification of cessation of employment or cessation by reason of death for an employee in private section (CP22A)

To notify IRBM who is or is likely to be chargeable to tax not less than 30days before the cessation of employment and submitted online via e-SPC or at IRBM office which handles the employee income tax number.

g) Notification of cessation of employment or cessation by reason of death for an employee in the public sector (CP22B)

To notify IRBM who is or is likely to be chargeable to tax not more than 30days after being informed of the death and submitted online via e-SPC or at IRBM office which handles the employee income tax number.

h) Notification of employee leaving Malaysia for more than 3 months (CP21)

To notify IRBM who is chargeable to tax not less than 30days before the expected date of departure and submitted online via e-SPC or at IRBM office which handles the employee income tax number.

i) Statement of monetary & non-monetary incentive payment to an agent, dealer or distributor pursuant to Section 83A of the Income Tax Act 1967 (CP58)

- To prepare the CP58 for its agents, dealers, and distributors.

- To render the CP58 by 31 March of the following year to its agents, dealers, and distributors, if the amount of incentive (monetary and non-monetary) exceeds RM5,000 during the calendar year.

- If LHDN requests for a listing of CP58 information, the employer shall include all information of the agent, dealer or distributor even if the amount is below RM5,000.

j) Withholding Tax (WHT) on Payments to agent, dealer or distributor

Effective from 1 January 2022, the 2% WHT will be imposed on monetary payments made by companies to their authorized agents, dealers or distributors, arising from sales, transactions or schemes carried out by the Agents.

3. What are the consequences of failing to comply?

a) Failure to furnish a Return Form

- Shall be liable to a fine of RM200 - RM20,000 or imprisonment for a term not exceeding six months of both.

b) Late payment

- 10% shall be imposed on the amount unpaid without any further notice.

Sources

Employer Responsibility

https://www.hasil.gov.my/en/employers/responsibility-of-employer/

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