Important Updates from IRBM on Employer's Tax Compliance Obligations

 1.

Employee Termination or Death 

Employers are required to notify the IRBM of employees termination or death to facilitate tax clearance. Employers must submit the notification of cessation of employment vide the following forms:

• Form CP22A- for private sector employees.
• Form CP22B - for government employees.

 2.

Withholding Payments Until Tax Clearance Letter is issued

Employers are required to withhold any payments due to the employee for up to 90 days or until the tax clearance letter is issued—whichever is earlier. This applies in cases of:

• Termination
• Employee’s death
• Employee's leaving Malaysia for more than three months upon cessation of employment/end of contract

This crucial step guarantees that any outstanding tax liabilities are cleared before the employee moves on to another employer or returns to their home country.

 3.

Important Changes to Employee Information Submissions

With effect from 1 September 2024, any amendment to the employees’ information must be submitted through the e-SPC system on the MyTax portal. However, application for cancellation can still be submitted manually at the relevant HASiL office.
 

 4.

Issuing EA and EC Statements on Time 

Employers are required to issue Statement of Remuneration From Employment to employees by February 28 of each year:

• Form EA - for private sector
• Form EC-  for public sector.

These statements must be provided on time to enable the employees to fulfill their tax obligations by submitting their tax returns within the stipulated period. These statements are vital to help the employees to report their income accurately through e-filing system, which will be accessible on 1 March 2025.