Every employer, as well as every company regardless of whether they have employees or not, must submit form E to LHDN. Failure to do so will result in LHDN taking action against the company's directors. Employers are 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 both. Form E must be submitted by 31 March of the following year, with a 1-month grace period for online filing.
Other than furnishing a Form E, employers are also responsible to notify the IRBM of the new employment, cessation of employment, retirement, death or departure from Malaysia of an employee.
1. Form CP 22 Notification of new employee
Upon employing a new employee, the employer has obligations to notify the IRBM assessment branch by filing and submitting a form CP 22 within one month from the date of commencement of employment.
Form CP22 to be filed by employers for new employee who is subject to or may subject to income tax.
Employer is not required to send notification using CP22 to the IRBM if the new employee is not subject to income tax.
2. Form CP 22A Notification of Cessation of employee
When an employee is leaving the company, the employer has obligations to notify the IRBM assessment branch by filing and submitting a form CP 22A at least one month before the cessation date. Cessation including:
Resign
Retirement
Death (Notification must be done within one month from the date of death)
CP22A to be filed by employers for employee who is subject to or may subject to income tax. Employer is not required to send notification using CP22A to the IRBM if:
Employee is subject to MTD and deduction has been made by the employer.
Employee’s total monthly remuneration is less than the minimum income subject to MTD.
Employer is aware that the employee is to be employed elsewhere in Malaysia.
3. Form CP 21 Notification of Departure from Malaysia for Period Exceeding Three (3) Months
IF an employee is leaving Malaysia for more than three months after the employment cessation, the employer is obligated to submit a Form CP 21 at least 1 month before the expected date of departure of employment in Malaysia.
Non-compliance
According to Income Tax Act 1967 Section 120:
Fine of not less than RM200 and not more than RM20,000; Or
Imprisonment not exceeding 6 months;
or both