Understanding Form E & C.P.8D
As an employer in Malaysia, you have various tax obligations and duties that require compliance. Among these, one crucial responsibility is submitting Form E and C.P.8D to the Inland Revenue Board (IRB).
This article will outline your obligations as an employer and underscore the risks associated with non-compliance.
What is Form E & C.P.8D?
Form E is a declaration form that all employers must complete and annually submit to the IRB. It serves primarily to report employee-related information, including the total number of employees as of December 31st, new hires and departures during the year, as well as detailed employee data.
On the other hand, Form C.P.8D is a comprehensive report enabling employers to declare company details and the remuneration paid to each employee throughout the year. It requires employers to record and report various information, such as total deductions claimed and specific tax deduction particulars, irrespective of employees’ contract types (e.g., full-time, part-time, interns, or fixed-term).
Who should submit Form E & C.P.8D?
Form E is typically considered complete only when Form C.P.8D is submitted before or by the due date. However, many employers often grapple with understanding their obligations regarding these forms. A common issue arises regarding whether employers without any employees are still mandated to submit these forms.
In reality, companies (including dormant ones), limited liability partnerships, trust bodies, and cooperative societies are obligated to furnish Form e-E and C.P.8D, regardless of their employment status.
For sole proprietorships or partnerships without employees, Form C.P.8D submission is unnecessary. Nonetheless, the submission of Form E remains mandatory, regardless of employment status. In essence, every employer must submit Form E, and exemptions from Form C.P.8D submission are granted only to specific categories of employers.
The due date for submission of Form E & C.P.8D
Starting from the Year of Assessment (YA) 2023, Form E and C.P.8D submission must be done electronically via e-Filing. Manual submissions are no longer accepted, and only Employers, Employers’ Representatives, or Tax Agent e-Filing System (TAeF) roles for certified tax agents are permitted.
Employers must submit Form E and C.P.8D by the statutory deadline, March 31, 2024. Fortunately, a one-month grace period is provided, allowing filing until April 30, 2024.
Non-compliance and penalties
Failure to prepare and file Form E & C.P.8D by the deadline may result in fines ranging from RM200 to RM20,000, or imprisonment for up to 6 months, or both, under the Income Tax Act 1967 – Section120(1)(b).
In summary, employers play a crucial role in accurately declaring employee information to the IRB via Form E. Timely and accurate submissions are essential to avoid penalties.
