You are on page 1of 10


First, we are thankful to Allah the Almighty, Generous and Merciful because his grace, this Responsibilities of Taxpayers and Employers report can be completed.

We would to thank our beloved and respected lecturer Mr. Ahmad Sanari bin Md. Salleh for guiding us in completing this report , spending time, sharing ideas and experience with us right from the beginning until the report completely. Besides, we would also like to take this opportunity to thank the people surround us that lending their hand during the process of making this Responsibilities of Taxpayers and Employers report. They would be our friends, group members, family members and our lecturers for their assistant, information, advice and support. Not forgetting, I would like to give a credit to all our group members who had worked very hard to complete this report. Their contribution, commitment, and support are vital toward the completion of this business plan and they did very well job overall.

To end with, thank you to everyone who involved directly or indirectly for your contribution and help to being completing this report. Thank you very much.





Malaysian moves to current YA with effect from 1 January 2000. Income tax payable in 2011 is for the income derived in the year 2011. This is known as pay as you earn. The income payment of income tax in the year 2011 is an estimated tax for that year , determined either based on estimated income for the year 2010 income tax payable assessed in prior year(s). As our title taxpayer and employers have their responsibilities to pay the amount according to income tax Act 1967. Responsibilities taxpayers when taxpayers submits the return form YA 2010 in the year 2011, the tax benefits accorded to him is what is proposed in the 2010 budget on 23 October 2009, which has been subsequently as the finance Act 2010. For taxpayers with business income they have their responsibilities which they have to submit their returns not later than 30 June in the year following a YA. As the employers they also have their responsibilities, employer is required to fill the form CP8A or CP8C which have to fill up with the concern details or remuneration paid to each individual employee, including the amount contributed to EPF and amount of tax deducted under monthly deduction scheme(PCB). Besides that employers have to notice of employee commencing employment of an individual who is likely to be chargeable to tax on employment income should be sent to the IRB not later than one month from the commencement date of employment. Next employers have notice of cessation of employment which notification of cessation of employment for employee is to be submitted to the IRB. Furthermore , employers also have their responsibilities when employee leaving Malaysia, for that a notification of Form CP 21 must be submitted leave Malaysia exceeding three months. Employers also have to required when to retain the money whatever amount of money due to the employee at least 90 days after the receipt. The last responsibilities of employers is have to required withhold tax under PCB system in other word is schedule tax deduction.




Tax is subject , covering the entire tax is in Malaysia. One tax topic has been studied understood learned and was given to tax companies in Malaysia. Here is the science that can be summed up in this topic i. ii. iii. iv. Understand the true meaning of employers and taxpayers Learn about the real responsibility of taxpayer and employers Learn how real way to pay for employer and taxpayer Can determine the tax rate corporations that are imposed to companies by type of company



Critically evaluate - It is important to critically evaluate the results and the whole study. The present study has certain limitations that need to be taken when considering the study and its contributions. The quality of the research has been discussed in the end of the study. However, some of these limitations can be seen while doing this report. Misunderstanding - One of the limitation is misunderstanding. Try to understand what question and lecture want base on title given. Thus, the answer need to compare in each other before start writing it. Missing values - There were many missing values in the data while doing this report. Sometime the data missing and cannot be detect. So, need to done twice and make sure all data are included.

Due to data correction - Need to write the information and data careful. More correction in grammar while typing the data. Need to re-check and typing again if have a correction. Time management - Need to find time to done this report. To make sure all work finished.


2.0 2.1


2.1.1 Definition : Is the person who derives incomes from Malaysia. The person will be assessable and chargeable to tax.

2.1.2 Responsibilities of a taxpayer Be co-operative, well mannered, fair, honest and with integrity; Provide reasonable facilities and assistance to enable the audit officer to carry out his duties as outlined in Public Ruling No. 7/2000 which includes the following: i. Giving access to the audit officer to his business premises, providing information and making available documents and records required for examination; ii. Giving explanation regarding the business, the accounting and information systems; iii. Giving permission to examine and make copies of records, documents and books of accounts whether in the physical and / or electronic medium; iv. Assisting in the provision of or providing access to records, documents and books of accounts in the physical and / or electronic medium; and v. Allowing the use of copiers, telephone or other communication equipment, lighting and power, office space, furniture and providing facilities for copying of electronic records onto tapes, disks or diskettes. Co-operate in providing complete responses to all queries: i. If questions posed are ambiguous, he may seek clarification from audit officer; ii. Questions posed normally relate to the business carried out. However, in the case of a sole proprietorship or a partnership, the taxpayer may also be queried on personal matters such as personal expenses, savings, bank account, assets, etc; and iii. iii. If a taxpayer fails to co-operate and provide the required information, he shall be deemed to have committed an offence under the provisions of the ITA.


2.1.3 The taxpayer is prohibited from Giving any form of gifts to the audit officer and transacting any business with the audit officer during the audit process; Making any form of payments to the audit officer; and Obstructing or hindering the audit officer in the exercise of his functions. Such obstruction is an offence under section 116 of the ITA. Obstruction includes the following: i. Obstructing or refusing an audit officer from entering lands, buildings, places and premises to perform his duties in accordance with section 80 of the ITA; Obstructing an audit officer from performing his functions and duties under the provisions of the ITA ; Refusing to provide books of accounts, or other documents in the custody of or under his control when required by the audit officer; Failing to provide reasonable assistance to the audit officer in carrying out his duties; and Refusing to answer or give responses to questions raised during the course of an audit.

ii. iii. iv. v.



Employers 2.2.1 Definition : A legal entity that controls and directs a servant or worker under an express or implied contract of employment and pays (or is obligated to pay) him or her salary or wages in compensation Introduction of a employers.


The employer is required to determine MTD calculation is accordance with Income Tax (Deduction From Remuneration) Rules 1994 (MTD Rules) according to Explanatory Notes gazette by IRBM. Employer shall pay to the Director General, not later than the tenth day of every calendar month; the total amount of tax deducted or should have been deducted by him from the remuneration of employees during the preceding calendar month. Every employer shall, for each year, prepare and render to his employee a statement of remuneration of that employee C.P.8A (EA) and C.P.8C (EC) form on or before the last day of February in the year immediately following the first-mentioned year in order for each employee to fill and submit return form in accordance to subsection 83(1A), Income Tax Act 1967(Act). Every employer shall, for each year, furnish to the Director General a return in the prescribed form (E form) not later than 31 March in the year immediately following the first-mentioned year in accordance to subsection 83(1), Act


The objective employers is

Law of recent amendments to the Income Tax Act and procedures for complying with taxation obligations Application and discharging of duties in submitting correct Returns How to optimise tax benefits and minimise liability How to avoid penalties and eliminate prosecution.


2.2.4 The responsibilities of employers is Employer's responsibilities under the MTD Rules are as follows: a. Deduct the MTD from the remuneration of employee in each month or the relevant month in accordance with the Schedule of Monthly Tax Deductions or Computerised Calculation Method and pay to the Director General. b. Make additional deductions from employee's remuneration in accordance with the direction given by the Director General under Rule 4 of MTD Rules. c. Employer shall pay to the Director General, not later than the tenth day of every calendar month, the total amount of tax deducted or should have been deducted by him from the remuneration of employees during the preceding calendar month. d. Furnish a complete and accurate employees information of the following in a return when submitting MTD payments/additional deductions: i. ii. iii. iv. income tax reference number (if any); name as stated on identity card or passport; new and old identity card number/police number/army number or passport number (for foreign employee); and MTD/additional deductions amount.

If the employer fails to furnish a complete and accurate information, MTD payment will not be accepted. Resubmission of MTD payment may be compounded if payment is made after the tenth day of the following month. i. To furnish information on cessation of payment of employees remuneration as required under Rule 13, MTD Rules in a prescribed form. Ii Keep and retain in safe custody sufficient documents for a period of seven years from the end of the calendar year in which the remuneration is deducted in respect of his employee according to the MTD Rules.




As a conclusion that can be conclude is all taxpayers and employers have their own responsibilities. According to Income Tax Act 1967 they have to follow and full fill all their responsibilities . Taxpayers have to fulfill their responsibilities to Provide reasonable facilities and assistance to enable the audit officer to carry out his duties Co-operate in providing complete responses to all queries

So from that responsibilities taxpayers have to remind their self to complete the responsibilities towards the tax Act. If taxpayers do not follow the rules it might be problem and they can be fine or they can get penalty from Inland Revenue Board. Employers have to fulfill their responsibilities to required to fill the form CP8A or CP8C of employee commencing employment [s 83(2)] notice of cessation of employment [s 83 (3)] employee leaving Malaysia retain the money schedule tax deduction

As a conclusion same with responsibilities of taxpayers employers also must follow and do complete their responsibilities, if not for sure employers might have problem as well as their responsibilities are not completed.




Choong Kwai Fatt ; Malaysian Taxation Principle and Practice , 17th Edition; Kuala Lumpur : Infoworld; 2011; pages 533-540 6

10 | P a g e