The Tax Clearance Letter is a letter issued by the Inland Revenue Board (IRB) to notify the employer of a deceased / retiring/resigning employee’s tax liability to enable the employer to make the final payment of salary/compensation/gratuity to the employee.
Are you aware of your reporting responsibilities as an employer under the Malaysian Income Tax Act, 1967?
It is critical to understand the legal requirements because they are mandatory, and failure to comply with them will result in penalties. One of the employer’s responsibilities, among others, is to notify the Malaysian Inland Revenue Board (MIRB) of an employee’s termination of employment, retirement, death, or departure from Malaysia.
On February 12, 2016, the MIRB published Operational Guidelines on Procedures for Applying for a Tax Clearance Letter for Individuals. The duties of each party in regard to the tax clearance application were also explained in this guideline.
Type of CP Form
- CP21 – Notification by Employer of Departure from the Country of an Employee
- CP22 – Notification of New Employee
- CP 22A – Tax Clearance Form for Cessation of Employment of Private Sector Employees
- CP 22B – Tax Clearance Form for Cessation of Employment of Public Sector Employees
| Form | Submission Period | Method of Submission | Download Link |
| FORM CP21 | Not less than 30 days before the date employee is expected to leave Malaysia |
i. Online vide e-SPC ii. By hand iii. By post |
Click here |
| FORM CP22 | Within 30 days from commencement of employment |
i. By hand ii. By post |
Click here |
| FORM CP 22A | Not less than 30 days before the cessation of employment OR not more than 30 days after being notified of death of employee |
i. Online vide e-SPC ii. By hand iii. By post |
Click here |
| FORM CP 22B | Click here |
What is the Effect of Noncompliance?
If convicted, you are punishable by a fine of not less than RM200 or not more than RM20,000, or imprisonment not exceeding six months, or both, under subsection 120 (1) of the ITA 1967.
Content Contributor
Lam Kwai Soon
Managing Director of Tax
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