Employer is responsible to notify IRBM at least thirty (30) days before the ceases date if employee is:

  1. Soon to retire.
  2. Subject to MTD scheme and the employer has not made any deduction.
  3. Leaving Malaysia permanently.

The employer must withhold money payable to the employee until Tax Clearance Letter is received from HASiL Office.

However, employer does not require to notify cease from employment or withhold any money payable to the employee if:

  1. Employee is subject to MTD and deduction has been made by the employer.
  2. Employee's remuneration is less than the minimum income subject to MTD.
  3. Employer is aware that the employee is to be employed elsewhere in Malaysia.

Required Forms:

a. CP22A - Notification of cessation of employment (Employment of Private Sector Employees)

b. CP22B - Notification of cessation of employment (Employment of Public Sector Employees)

Employer must submit CP21 Form (which can be downloaded here) to IRBM Offices that handle the tax file.

Employers must withhold any monies payable to employees until tax clearance letter are received from IRBM Offices. However, if the employee's departure is for a frequent period in the course of his employment, employers do not have to submit CP21 and withhold any payment to the employee.

Failure to notify IRBM is liable to a fine of not less than RM200 and not more than RM2,000 or to imprisonment for a term not exceeding six months or to both [Section 120(1), Income Tax Act, 1967]. Employer is responsible for any tax due from the above mentioned employee. both [Section 107(4), Income Tax Act, 1967]

Closing of files upon employment termination / closing of business

Application can be made in times where a taxpayer is retired or business operation has fully suspended

Application must be submitted in written form along with a show cause letter to IRBM Offices that handle the tax file.

Circumstances When Tax File Can Be Closed:

  1. A retiree with no taxable income.
  2. Leaving Malaysia for good.
  3. A minimum of 55 years of age and has no taxable income

This notification can be forwarded to the HASiL Office where your file is handled.

Kindly ensure there is no outstanding amount (to be paid) or pending of refund status before income tax file closure application is submitted.