(Tax Update) Key Changes for Employers - New Employee and Resignee

(Tax Update) Key Changes for Employers - New Employee and Resignee

Dear KTP Clients,

We hope this newsletter finds you well.

Here are the latest updates from the Inland Revenue Board of Malaysia (IRBM) concerning employer tax matters, effective from January 1, 2024:

1. Mandatory Use of e-Services for Selected Tax Matters

IRBM has mandated the use of e-services for certain tax matters via the MyTax Portal. This includes various employer-related tax transactions to streamline processes and ensure efficiency.

2. Application for Employee Tax Clearance Letter (SPC) via e-SPC

New Guidelines for SPC Applications

Updated guidelines for SPC applications by employers were published on April 1, 2024. Employers can access these guidelines on the IRBM Portal under https://www.hasil.gov.my/en/employers/ section.

Exemptions from SPC Applications

Employers are exempted from applying for SPC for employees whose remuneration is not taxable or who have already had their tax deducted via the Monthly Tax Deduction (MTD) scheme and received no additional compensation.

General guide for employers on Forms CP22A / CP22B notification
Source : https://www.hasil.gov.my/en/employers/termination-of-service/

3. New CP22A/CP22B Submission Format

Starting September 1, 2024, submissions of CP22A/CP22B in batches through e-SPC must follow the new format specified by IRBM.

4. Amendments and Additional Applications for SPC

From August 1, 2024, employers can make amendments or add to SPC applications through e-SPC. Manual applications for amendments or additional SPCs will no longer be accepted starting September 1, 2024.

5. Mandatory e-CP22 for New Employee Notifications

Implementation Date

Submission of new employee notifications via e-CP22 will be mandatory from September 1, 2024.

Access Right

Authorized individuals and tax agents can access e-CP22 through the MyTax Portal starting from August 1, 2024.

Submission Methods

Notifications can be submitted either through a web form or by uploading a data file in .txt format. The data file format can be downloaded from the e-CP22 application.

6. Employee Departures Exceeding 3 Months

Notification Requirement

Employers must submit Form CP21 if an employee, chargeable to tax on their employment income, plans to leave Malaysia for more than 3 months.

Form CP21 must be submitted at least 30 days before the employee’s departure date.

Online Submission

Starting January 1, 2024, Form CP21 must be submitted online via the MyTax portal using the e-SPC application.

Frequent Travelers Exception

Employers do not need to submit Form CP21 if the employee frequently leaves Malaysia as part of their job and IRBM is satisfied with this arrangement.

Withholding Employee Payments

Employers must withhold any payments to employees leaving Malaysia for more than 3 months without intending to return.

These payments can only be released with IRBM’s permission, and only after 90 days from IRBM’s receipt of Form CP21.

Guide for employers on Form CP21 notification

Source : https://www.hasil.gov.my/en/employers/termination-of-service/

IRB Assistance

For further inquiries, you can contact the HASiL Contact Centre at 03-8911 1000 or utilize the HASiL Live Chat and Feedback Form available on the official IRBM Portal.

These updates aim to enhance the efficiency and accuracy of tax-related processes for employers. We encourage all our clients to familiarize themselves with these changes and make the necessary preparations to comply with the new requirements.

Thank you for your attention and cooperation.

Warm regards,

KTP Team

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