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Submission of Form CP 21/Form CP 22A

Updated: Oct 29, 2022

On September 27, 2022, the DESIRE Dialogue No.1/2022 was hosted by the Inland Revenue Board of Malaysia (IRBM) in collaboration with the Chartered Tax Institute of Malaysia (CTIM) and other professional organisations to explore concerns about compliance and operations.


Under Section 83(3) – a notice of cessation of employment (Form CP 22A) must be submitted within 30 days before the date of cessation of employment.


Under Section 83(4) – the employer is exempted from submitting the notice of cessation if:

  • the employee has been subject to a monthly tax deduction ("PCB"); or

  • the employee’s remuneration is below the taxable thresholds; or

  • the employee will continue working & is not retiring from employment.

Under Section 83(4) – For foreign leavers, where an employee is about to leave Malaysia for a period exceeding 3 months, the employer is required to furnish Form CP21 not less than 30 days before the expected date of the employee’s departure.


Where applicable, failure to submit the notice of cessation would mean that the employer is liable to a fine of not less than RM200 and not more than RM20,000 or to imprisonment for a term not exceeding six months or to both.


Form CP 21

Previously, in practice, IRBM was not strict with the 30 days notice period before the employee’s departure. In recent times, IRBM has been imposing a fine for every Form CP21, which is late.


The IRBM has also revisited Forms CP 21 submitted in the earlier assessment years to impose fines.


CTIM comments:

We want to request whether IRBM can consider adopting the imposition of the fine for late submission of Form CP 21 for taxpayers with valid reasons.


Sometimes, the employer may not be aware that the employee (expatriate) will be transferred to another location until the very last minute.


IRBM's response:

Based on the scenario, the employer needs to submit supporting documents to the branch handling the employer's file to appeal the penalty that has been imposed.

Form CP 22A

Where the exemption from notification is applicable, the employer would not have submitted Form CP 22A for local leaver cases.


However, there are cases where the employee meets the exemption requirement at the cessation time but subsequently decides to leave the workforce.


In such cases, IRBM has imposed fines on the employer for failure to notify the IRBM.



CTIM comments:

We want to request whether IRBM can consider not imposing fines as long as the employer can show signed confirmation from the employee that the individual intends to continue being employed.


Often, an exiting employee may not be transparent with the employer.


IRBM's response:

If penalties are imposed for failure to submit Form CP 22A, IRBM agrees that the employer submits the employee's verification documents to prove that he is about to work for the new employer.


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