Return Form of Employer in Malaysia
In Malaysia, employers must report the remuneration paid to their employees each year to the Inland Revenue Board of Malaysia (“IRBM”) through Form E, as required under Section 83 the Income Tax Act, 1967 (“the Act”). Form E (Return Form of Employer) is submitted together with Form C.P.8D [Return of Remuneration from Employment, Claim for Deduction and Particulars of Income Tax Deduction under the Income Tax Rules (Deduction from Remuneration) 1994], which provides detailed information on each employee.
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Form E and Form C.P.8D
Form E is the annual return furnished by employers to report the remuneration paid to employees during the year. All employers are required to submit Form E for the relevant year, including those that did not pay any remuneration, such as dormant companies or entities with directors who do not receive any remuneration.
This applies to a wide range of employers, including:
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Companies, sole proprietors and partnerships
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Limited liability partnerships (“LLPs”)
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Trust bodies, cooperative societies, associations and clubs
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Form E provides a summary of employment information, including:
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Total number of employees at the end of the year;
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Number of employees subject to Monthly Tax Deduction (“MTD”);
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Number of new employees;
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Number of employees who ceased employment; and
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Number of employees who ceased employment and left Malaysia.
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Form C.P.8D is submitted alongside Form E and contains detailed information on each employee, such as:
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Employee identification and category
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Total remuneration and benefits received
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Amount of MTD
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Whether tax is borne by employer
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Form C.P.8D information must contain all employees, including full time, part time, contract employees and interns as well as individuals who are responsible or engage in the management of the organisation (e.g. company directors, co-operative society’s board members, association’s controlling members).
The following employers are exempted from submitting Form C.P.8D if they have no employees during the year:
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Sole proprietorship;
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Partnership;
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Hindu joint family
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Deceased person’s estate.
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Who Can Submit Form E and How to Submit Form E
Form E and Form C.P.8D must be submitted electronically to the IRBM through the MyTax portal.
The form may be submitted by the following persons having the following roles in MyTax:
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Role
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Eligible individuals
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Employer
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· Company directors / Limited
liability partnership
· Organisation administrator
· Cooperative
· Association
· Labuan Entity
· Owner of sole proprietorship /
partnership
· Local authority
· Special employer
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Employer representative
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· Company employee
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Licensed tax agent
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· Licensed tax agent under
Section 153(3) of the Act
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Submission Deadline for Form E
Employers are required to submit Form E and Form C.P.8D annually for the preceding year of assessment. The return must be furnished electronically via MyTax portal to the IRBM.
The deadline for submission is 30 April of the following year, which includes the 30-day grace period granted by the IRBM.
Form E will only be considered complete if Form C.P.8D is submitted within the stipulated deadline. Employers who have submitted information via e-Data Praisi/e-CP8D before 25 February of the following year are not required to complete and furnish C.P.8D via Form E.
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Record-Keeping Requirements
Employers are required to maintain supporting records relating to employee remuneration and benefits reported in Form E, including payroll records, details of allowances, benefits-in-kind, documentation supporting any tax-exempt allowances and others.
Under Section 82 of the Act, employers must keep and retain sufficient records for a period of seven years from the end of the year of assessment to which the records relate.
These records must be maintained to facilitate any future tax audit conducted by the IRBM.
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Penalties for Non-Compliance
Failure to submit Form E and Form C.P.8D within the stipulated deadline would constitute an offense under Section 120(1)(b) of the Act for which an employer could be prosecuted. On conviction, the employer will be liable to a fine of not less than RM200 and not more than RM20,000, or to imprisonment for a term not exceeding 6 months or to both.
For further information, please visit the official website of the Inland Revenue Board of Malaysia at
https://www.hasil.gov.my/en
KAIZEN Group, together with its associate firms in Malaysia, can help the clients to perform these compliances formalities so as to maintain the Malaysia company in good standing. Please call and talk to our professional accountants in Kaizen for further clarification.
KNOWLEDGE
