Preparing and completing the Form E can be challenging to employers as they need to ensure that every detail of their employees together with their income is reported correctly as per the requirements by the Malaysian Inland Revenue Board (“MIRB”). Pursuant to subsection 83(1B) of the Malaysian Income Tax Act, 1967 (“MITA”), it is mandatory for all employers (including companies which are dormant and/or have not commenced business) to submit the Employer’s Return (“Form E”) for the year ended 31 December 2021 to the MIRB. The deadline to submit Form E for the year 2021 electronically is by 31 March 2022 (unless a grace period is granted by the MIRB).
The MIRB has issued the Tax Audit Framework for Employer (“Framework”) dated and effective on 1 October 2021. This Framework has been released to ensure the employer tax audits are carried out fairly and transparently. Most employers may not be aware of their tax obligations, and it is sometimes difficult for them to comply with the law due to the challenging nature of work in respect of the different assignment/ employment of the employees.
Therefore, it is crucial for the employer to understand The Framework and comply with the employer’s tax obligations to avoid any offences for non-compliance under Sections 83 and 107 of the MITA.
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