CP 38 vs CP 39 under Monthly Tax Deduction (MTD)

01What is the difference between CP39(PCB) Vs CP38

Potongan Cukai Bulanan (PCB)/Monthly Tax Deduction (MTD)

A tax deduction on eligible employees’ remuneration based on the MTD calculation to clear current year tax payable. It should be remitted to LHDNM by 15th of the following month.

What is CP39?

e-CP39 is a method for employers to send employees' Monthly Tax Deduction (PCB) data and pay online. This system is specifically used by the employer who did not have a computerised payroll system

What is CP38?

A notification issued by LHDNM for employer to make the deduction based on the schedule given to settle the prior year outstanding tax of taxpayer.

What are the consequences of non-compliance?

a. Late Remittance of MTD

An employer who fails to remit payment on or before the 15th of the following month can be fined with minimum of RM200 and not more than RM20,000 or 6 months imprisonment or both.

- Subsection 120(1)of ITA 1967

b. Fail to deduct MTD or deduct but not remitted

An employer who does not deduct MTD or deducts but fails to remit the MTD to IRBM can be prosecuted in a civil court.

- Section 107(4) of ITA 1967

Where to report the CP39(MTD) and CP38 in Form EA (yearly remuneration statement for private employees)?

Sources: -

What are Employers Responsibilities

https://phl.hasil.gov.my/pdf/pdfam/R08_2020_TANGGUNGJAWAB_MAJIKAN.pdf

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