An employer who recruits staff where his’s remuneration package is subject to Malaysia Income Tax, then the employer has an obligation to file the Form E either physically or online submission on or before 31 March each assessment year.
a) Form E
The Form E is a document content the information about employee and monthly tax deduction.
The following deduction / detail
1) Total gross deduction,
2) Benefits in Kind,
3) Value Of Living Accommodation,
4) Employee Share Option Scheme (ESOS) Benefits
5) Tax Exempt Allowances / Perquisites / Gifts
Those information important, especially for employees to report his / her personal tax through the EA Form (Private sector) / EC Form (Public sector). All the records and documents should be keep for 7 years for the Inland Revenue Board audit purposes.
b) Monthly Tax Deduction (MTD)
The employer required to deduct a sum as tax instalment from the employee’s salary. The employer can pay MTD on behalf the employee either by cash or cheque payment at any other bank in Malaysia. The information about the employee can be submitted online through e-PCB. If the company has many employees and the information of MTD is a lot and complicated, then the employer can save their information in the Diskette-CP 39 and submitted to Inland Revenue Board (IRB). The MTD is required to remit to IRB either before or on the 15th of the following month of remuneration paid.
c) Notification Of Employment
a) Form CP22– Form for notification of new employee
The employer need to inform of any new employee within 30 days.
b) Form CP22A– Tax Clearance Form for Cessation of Employment of Private Sector Employees
Form CP22B – Tax Clearance Form for Cessation of Employment of Public Sector Employees
The employer needs to hold the employee salary (if any), until the clearance letter is issued.
c) Form CP21 – Notification by Employer of Departure from the Country of an Employee
The employer need to inform the resignation of an employee within a month and withhold payment (if any):
i) The employee who will be retiring
ii) The death of an employee
iii) The employee intending to leave Malaysia (If more than 3 months)
iv) The employee who is subject to MTD scheme, but fails to remit MTD
Conclusion
The Employer Tax Filing is an annual statutory responsibility of every employer, failure to compliance may committed an offence and severe tax penalty.
Comments