Personal Tax Clearance | Form CP22 | Form CP22A

cp22 | cp22a | personal tax | tax clearance

cp22 | cp22a | personal tax | tax clearance

The Tax Clearance Letter (Surat Penyelesaian Cukai (SPC) is a letter issued by MIRB to notify the employer of a deceased / retiring / resigning employee’s tax liability to enable the employer to make the final payment of salary / compensation / gratuity to the employee.

Therefore, it is necessary to consider the obligations under the law as these obligations are mandatory and failure to comply with these obligations will result in penalties to be levied. Among other items, one of the duties of the employer is to inform the Malaysian Inland Revenue Board (MIRB) of the employee’s cessation of jobs, retirement, death or departure from Malaysia otherwise penalty will be imposed.

Notification of New Employee- Form CP22

Form CP22 is a report from the government issued by the LHDN and also a form for New Employee Notification.

Employer is not required to send notification using CP22 to the IRBM if:

1. The new employee is not subject to income tax

Employer’s Responsibility

1.  The employer is obligated to inform the assessment branch of IRBM by filing and submitting a CP 22 form within one month from the date of commencement of an employment.
2. Employer to submit Form CP22, which is Notification of new employees

If Not Notify:

Failure to do so IRB will render an employer liable to:

1. Fine of not less than RM200 and not more than RM2,000. OR
2. Imprisonment for a term not exceeding six months or to both.

Retire or Cease from Employment in Malaysia– Form CP22A

Employer is responsible for notifying Inland Revenue Board, Malaysia, where the employee ceases employment if:

1. Employee is about to retire
2. Employee is subject to MTD and employer has not made any deduction
3. Employee is about to leave Malaysia permanently

However, employer is not required to send notification about employee ceasing of employment if:

1. Employee is subject to MTD and deduction has been made by employer
2. Employee’s remuneration is less than minimum income subject to MTD
3. Employer is aware that the employee is to be employed elsewhere in Malaysia. 

Again, Employer’s Responsibility

1. Employer shall notify IRBM at least 30 days before the date employment ceases.
2. Employer to submit Form CP22A – Notification of cessation of employment of Private sector employees
3. Withhold money payable respectively to the employee until they receive a Clearance Letter from Assessment Branch 

Failure to Notify:

Likewise, Failure to inform IRBM will render an employer liable to:

1. Fine of not less than RM200 and not more than RM2,000. OR
2. Imprisonment for a term not exceeding six months or to both.