Accurate employment reporting is a key part of maintaining proper tax and administrative records in Malaysia. Lembaga Hasil Dalam Negeri (LHDN) requires employers to follow specific procedures when handling new hires and staff departures. These procedures focus on administrative and tax compliance, rather than individual personnel updates.
1. Notification of New Employees (Form e‑CP22)
Employers are required to notify LHDN of any new employee within 30 days of their start date using the e‑CP22 system via the MyTax portal. This ensures payroll and taxation records are accurate from the start of employment.
2. Notification of Termination/Resignation (Forms CP22A / CP22B)
When an employee resigns, retires, passes away, or otherwise leaves employment, the employer must submit the correct form:
CP22A – for private sector employees
CP22B – for public sector employees
Notifications should be submitted at least 30 days before or after the change to comply with LHDN requirements.
3. Tax Clearance Procedures for Departing Staff
Submitting these notifications allows LHDN to issue a Tax Clearance Letter (SPC) and properly close the employee’s tax file. For employees leaving Malaysia permanently or retiring, final pay may need to be withheld until the SPC is issued.
Conclusion
Following these procedures ensures that employment changes are properly documented and compliant with Malaysian tax regulations. By staying informed about LHDN’s requirements, employers can maintain accurate records and facilitate smooth transitions for all staff, while employees can ensure their tax matters are properly managed.