Important Updates from IRBM on Employer's Tax Compliance Obligations

As part of ongoing efforts to streamline tax processes, the Inland Revenue Board Malaysia (IRBM) has issued guidelines that all employers—whether in the public or private sector—must adhere to regarding employee terminations or deaths. These changes are essential for ensuring smooth tax clearance for departing employees. Here’s what you need to know:

 1. Employee Termination or Death 

Employers are required to notify the IRBM of employee terminations or deaths 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. 

 5. Get Ready for the New e-PCB Plus System 

The IRBM has introduced a new system, e-PCB Plus to replace the existing e-PCB, e-Data PCB and e-CP39 platforms that integrates everything into one unified system on MyTax.

Employers are required to register their roles as Employer, Employer Representative, or PCB Administrator in MyTax under the new e-PCB Plus service system.
 

What You Should Do Now:  Ensure timely submission of Form CP22A or CP22B for employee’s termination or deaths. Withhold payments due to the employees until tax clearance letter is obtained Issue EA/EC statements on time to ensure compliance. Register for e-PCB Plus to ensure smooth tax filing  As an employer, staying informed and compliant with these tax obligations will help streamline operations and avoid potential penalties. If you have any questions or need assistance navigating these changes, do not  hesitate to reach out to us. Stay ahead of the curve and ensure you are  always on the right side of tax compliance!