Form E & EA Latest Development Part 3 of 4 

01eKTP 64

Latest Development on Form E & EA (including IRB payroll audit).

Monthly Tax Deduction (MTD) Employer’s responsibilities

• Deduct MTD as per computerized calculation method and pay to IRB
• Make additional deductions as directed by IRB (as per CP38)
• Furnish complete and accurate employee information when submitting MTD payments :Income tax reference numberName as stated on IC or passportNew and old IC number/police number/army number or passport number (for foreign employee)MTD/CP38 amount

Furnish complete and accurate employee information when submitting MTD payments :

• Income tax reference number
• Name as stated on IC or passport
• New and old IC number/police number/army number or passport number (for foreign employee)
• MTD/CP38 amount

Retain sufficient documents for 7 years from the end of the calendar year in which remuneration is deducted.

Monthly Tax Deduction (MTD) Employer’s responsibilities

• Inform every employee of his responsibilities :Submit prescribed form (Form TP1) to employer if employee wish to claim deductions and rebates in relevant monthSubmit prescribed form (Form TP3) to employer to notify information relating to previous employment in current yearRetain receipt relating to claims of deductions for 7 years from the end of that year of assessmentFurnish complete and accurate personal information and update any changes to his personal particulars to the employer
  

Inform every employee of his responsibilities :

• Submit prescribed form (Form TP1) to employer if employee wish to claim deductions and rebates in relevant month
• Submit prescribed form (Form TP3) to employer to notify information relating to previous employment in current year
• Retain receipt relating to claims of deductions for 7 years from the end of that year of assessment
• Furnish complete and accurate personal information and update any changes to his personal particulars to the employer
  

Monthly Tax Deduction (MTD)

Particulars of income which entitled to declare MTD

1. Salary
2. Wages
3. Overtime Payment
4. Commission
5. Tips
6. Allowance
7. Bonus or Incentives
8. Benefit in Kind
9. Director fees
10. Perquisite
11. Employee’s share option scheme
12. Tax borne by the employer
13. Gratuity
14. Compensation for loss of employment
15. Other remuneration related to employment
16. Value of Living Accommodation

Monthly Tax Deduction (MTD)

Failure to Comply with MTD

• Prosecution under Rule 17, Income Tax (Deduction from Remuneration) Rules 1994 [“The Rules”]
• Fined up not less than RM200 and not more than RM20,000 or to imprisonment for a term not exceeding six months or to both
• Types of offences under “The Rules” are:Failure to remit monthly tax deduction of employees by the 15th of the following monthFailure to deduct and / or less deduct monthly tax deduction of employees

Types of offences under “The Rules” are:

• Failure to remit monthly tax deduction of employees by the 15th of the following month
• Failure to deduct and / or less deduct monthly tax deduction of employees

Contact us for more information should you require our assistance.