Have You Submitted Form E?

March is where the season of tax submission begins. All Malaysian business irregardless of large, medium or small companies are held to submit a Form E to the Inland Revenue Board (IRB) by the end of this month.

What is a Form E?

In simple terms, Form E is a declaration report to inform the IRB on the number of employees and the list of employee's income details.

Effective from Year of Assessment 2014, all dormant companies with or employees, are mandatory to submit the Form E to IRB.

However, what caught the attention of IRB is that there are still many dormant companies not submitting a Form E!

Here's a quick check whether you should submit a Form E:

Did you notice that Sdn Bhd are required to file Form E irrespective active or dormant, with or without employees?

IRB has taken action against 65,392 employers

IRB has taken action against 65,392 company and non-company employers for not submitting the Form E for Year of Assessment 2014.

These employers, failing to submit a Form E, are liable to a fine of not less than RM 200 and not more than RM 20,000 or to imprisonment for a term not exceeding 6 months or to both under the Income Tax Act Section 120(1)(b).

In fact, the biggest problem is that many companies are not aware that they have met the criteria to submit a Form E. Companies who have employees, issued salary or registered an E-filing number are required to file a Form E.

IRB tracing employee's income using Form E

IRB may refer to Form E on an employee's tax information. Effective Year of Assessment 2009, according to Section 83(1A), every employer shall for each year prepare and render to his employee a statement of remuneration before the last day of February. This employee's statement of remuneration is also widely known as EA Form which shows the details of all employment income paid to each individual employee, including the amount contributed to approved pension funds and tax deducted. Unlike Form E, employers do not need to submit EA Form to IRB.

Form E field by the employer, is in fact where the IRB can do a cross check on whether an employee is reporting his income correctly. Therefore, the information of employee's income on a Form E must be consistent with the information stated on an employee's EA Form.

Mandatory E-Filing staring next year

Employers may still submit Form E manually to IRB this year for Year of Assessment 2015 submission. However, employers are mandatory to furnish Form E online via E-filing effective Year of Assessment 2016, which is due for submission in Year 2017.

2 Major information employers must provide in a Form E

  1. Employer's details.
  2. Employees' details, for any employees with annual gross remuneration of RM 34,000 and above; or for any employee with monthly gross remuneration of RM 2,800 and above (including bonuses, but does not include the salary arrears of previous years). If the employer do not has any employees under the stated range of annual income or monthly income, the A portion of employee data can be filed with a "0" on it.

Watch Out For These!

  • If the return from is not affirmed and duly signed, it shall be deemed incomplete and will not be processed.
  • The use of signature stamp is not allowed.
  • Failure to submit the Form E before 31 March 2016 is criminal offense and can be prosecuted in court.
  • Failure to furnish a return in accordance with subsection 83(1) or to prepare and render a statement in accordance with subsection 83(1A) will render the employer liable to prosecution under Section 120(1)(b) and on conviction, be liable to a fine of not less than RM 200 and not more than RM 20,000 or to imprisonment for a term not exceeding 6 months or to both.