Form E 2026: 6 Employer Filing Mistakes to Avoid

Statutory deadline: 31 March 2026 | Applies to: All employers in Malaysia

---

Filing season started and the same questions are coming in. The biggest one this year: do foreign workers need to go into Form E, and do I need to deduct PCB?

Both answers are yes. Here is the full picture, plus five other mistakes we see employers make every year.

---

Mistake 1: Leaving Foreign Workers Out of Form E and CP8D

Under S83(1) ITA 1967, every employer must file a Form E return for every employee. The law does not distinguish by nationality. Foreign workers — regardless of work permit type — must be included in both the Form E and the CP8D.

PCB must also be deducted. The correct rate depends on the worker's tax residency status for that calendar year:

Tax Residency Status	PCB Rate
Non-resident (fewer than 182 days in Malaysia)	30% flat on gross income. No personal reliefs.
Tax resident (182 days or more in Malaysia)	Progressive rates — same as Malaysian employees

The employer is responsible for determining which rate applies. One common point of confusion: the work permit levy paid by the employer is not employment income and is not subject to PCB. However, wages, allowances, and other payments made to the foreign worker are.

If you are unsure how to classify your foreign workers, get this sorted before filing.

---

Mistake 2: Not Reporting All Workers (The Deemed Employer Rule)

Many employers only think about workers on their formal payroll. The law goes further.

Under S83(6) ITA 1967, any person who benefits from a service provided by another person is deemed to be an employer — even without a formal employment contract and even if a third party handles the payment. This means contract workers, part-timers, and service providers engaged directly must all be captured in your Form E.

---

Mistake 3: Incomplete Income Disclosure in Form EA

Form EA must include all components of employment income — not just the monthly salary. Commonly missed items include:

• Annual bonuses
• Sales commissions
• Director's fees
• Allowances and perquisites

Under-reporting in Form EA creates a discrepancy between what the employer files and what the employee declares. This is picked up during LHDN's data matching process and can result in penalties for both parties.

---

Mistake 4: Wrong BIK and VLA Classification

The Value of Benefits-in-Kind (BIK) and the Value of Living Accommodation (VLA) must be calculated and classified following LHDN's prescribed method. Getting either wrong — whether under or over — affects the employee's taxable income figure and is one of the more common triggers for an employer audit.

If your company provides staff housing, company cars, or other non-cash benefits, verify the classification before filing.

---

Mistake 5: Thinking Dormant Companies Do Not Need to File

This one comes up every year. A company that was dormant — no operations, no revenue, no employees on payroll — is still required to file Form E. There is no dormancy exemption. If the company is registered, Form E must be filed.

---

Mistake 6: Submitting Form E Without the CP8D

LHDN treats a Form E without the accompanying CP8D as an incomplete submission. An incomplete submission is the same as no submission — and penalties under S112(1) ITA 1967 apply from the statutory deadline, not from when LHDN notifies you.

Always confirm the CP8D is attached before clicking submit.

---

Before You Submit: A Quick Checklist

☐ Foreign workers included in Form E and CP8D 

☐ Correct PCB rate applied (30% flat for non-residents; progressive for tax residents) 

☐ All income components captured in Form EA 

☐ BIK and VLA correctly classified 

☐ Form E filed even for dormant companies 

☐ CP8D attached to Form E

---

A Note on the Deadline

The statutory deadline for Form E is 31 March 2026. LHDN has in recent years granted a one-month administrative grace period for e-Filing, making the effective date 30 April. This concession is not guaranteed year to year and is not a statutory right. Target 31 March.

---

Need help before you file?

Our team at KS Chia & Associates reviews employer filings and CP8D before submission. Reach out if you need a second check.

WhatsApp: 011-2366 5233

#FormE #CP8D #ForeignWorker #PCB #LHDN #MalaysiaTax #EmployerAlert #TaxCompliance #KSChiaAssociates #TaxFiling2026

Form E 2025: LHDN Adds "Tax Agent" Section + New Reporting Rules

LHDN is getting stricter on compliance transparency. For the Year of Remuneration 2025, they haven't just changed the rules—they have changed the form itself.

Here are the 3 big updates KS Chia & Associates wants you to know.

1. The New "Part B": Tax Agent Accountability

In previous years, the declaration section was straightforward. This year, LHDN has restructured the form:

• Part B is now exclusively for "Particulars of Tax Agent Who Completes This Return Form".

• Part C is now the Employer's Declaration.

What this means: LHDN wants to know exactly who is preparing the data. It distinguishes between employers doing it themselves versus those using professional, approved tax agents. If you engage a firm like ours, we will complete Part B with our Tax Agent Approval No., giving you an added layer of professional assurance.

2. Who is an "Employee"? (The List Has Grown)

LHDN has updated the instructions for Part A (Number of Employees) and the C.P.8D. You must now explicitly include:

• Managers & Principal Officers

• Partners, General Partners & Designated Partners (for LLPs)

• Resident Directors & Officers (for Labuan Entities)

If you run an LLP or a Labuan entity, you can no longer leave these individuals off the list just because they aren't "standard staff."

3. MTD Timing Confirmed

The notes also clarified the year-end cutoff. MTD deducted from December 2025 payroll belongs to the 2025 Tax Year, even if the cash is paid to LHDN in January 2026.

Summary

The new Part B makes it clear: tax reporting is a professional responsibility. Don't risk errors on the new C.P.8D columns or the MTD cutoff.

KS Chia & Associates (AF001828) WhatsApp us: 011 2366 5233

𝗟𝗛𝗗𝗡𝗠 𝗔𝗻𝗻𝗼𝘂𝗻𝗰𝗲𝘀 𝗦𝘁𝗮𝗺𝗽 𝗗𝘂𝘁𝘆 𝗦𝗩𝗗𝗣: 𝗬𝗼𝘂𝗿 𝗖𝗵𝗮𝗻𝗰𝗲 𝗳𝗼𝗿 𝟭𝟬𝟬% 𝗣𝗲𝗻𝗮𝗹𝘁𝘆 𝗪𝗮𝗶𝘃𝗲𝗿!

LHDNM has just announced a 𝙎𝙥𝙚𝙘𝙞𝙖𝙡 𝙑𝙤𝙡𝙪𝙣𝙩𝙖𝙧𝙮 𝘿𝙞𝙨𝙘𝙡𝙤𝙨𝙪𝙧𝙚 𝙋𝙧𝙤𝙜𝙧𝙖𝙢𝙢𝙚 (𝙎𝙑𝘿𝙋) for stamp duty, running for six months from 1 January 2026 to 30 June 2026.

This is a great opportunity to sort out any unstamped documents you might have. If you have agreements or instruments that were executed between 𝟭 𝗝𝗮𝗻𝘂𝗮𝗿𝘆 𝟮𝟬𝟮𝟯 𝗮𝗻𝗱 𝟯𝟭 𝗗𝗲𝗰𝗲𝗺𝗯𝗲𝗿 𝟮𝟬𝟮𝟱 but haven't been stamped yet, you can do so now without any penalty.

Key Points of the Stamp Duty SVDP:

✅ 𝟭𝟬𝟬% 𝗣𝗲𝗻𝗮𝗹𝘁𝘆 𝗪𝗮𝗶𝘃𝗲𝗿 – Pay the outstanding stamp duty during the program period, and all late payment penalties will be fully waived.

✅ 𝗡𝗼 𝗔𝘂𝗱𝗶𝘁 – Instruments stamped under this program will not be subject to audit for stamp duty compliance.

✅ 𝗦𝗶𝗺𝗽𝗹𝗲 𝗣𝗿𝗼𝗰𝗲𝘀𝘀 – The penalty is waived automatically when you pay the duty. No separate application is needed.

⚠️ 𝙏𝙝𝙞𝙨 𝙥𝙧𝙤𝙜𝙧𝙖𝙢 𝙙𝙤𝙚𝙨 𝙣𝙤𝙩 𝙘𝙤𝙫𝙚𝙧 𝙘𝙖𝙨𝙚𝙨 𝙞𝙣𝙫𝙤𝙡𝙫𝙞𝙣𝙜 𝙛𝙧𝙖𝙪𝙙.

Don't miss this chance to get your documents in order. The deadline is 30 June 2026. If you need help reviewing your documents or have any questions about this program, feel free to get in touch with us.

📱 Whatsapp us: 011 2366 5233

Source : https://www.hasil.gov.my/media/4zvbflbl/20260128-kenyataan-media-hasil_pkps-duti-setem-2026.pdf

#LHDNM #StampDuty #DutiSetem #SVDP #PKPS #TaxMalaysia #MalaysiaTax #CharteredAccountant #KSChiaAssociates #PenaltyWaiver #StampDutyMalaysia

LHDN's New Guidelines for Social Media Influencers: What You Need to Know

The Inland Revenue Board of Malaysia (LHDN) has released new guidelines on the tax treatment of income for social media influencers, effective 14 January 2026. If you earn income from social media, it is important to understand your tax obligations.

This guide breaks down the key points of the new LHDN guidelines to help you stay compliant.

Who is Considered a Social Media Influencer?

According to the guidelines, you are considered a social media influencer if you are involved in activities such as:

•Creating and sharing content: Producing, recording, publishing, or displaying any audio, video, or written content on social media.

•Appearing in events: Participating in any activity, program, or event on social media.

•Promoting products or services: Engaging in advertising or promotional activities on social media.

•Receiving benefits: Accepting any form of payment, gift, or benefit for your involvement in social media.

What Income is Taxable?

All income you receive as an influencer is considered business income and is subject to tax. This includes both monetary and non-monetary payments. The guidelines provide a list of taxable income sources:

All income derived from your activities as an influencer is taxable, regardless of whether the payment comes from within or outside Malaysia.

What Expenses Can You Claim?

You can claim deductions for expenses that are directly related to your income-generating activities as an influencer. These include:

• Internet and data costs

• Filming and editing costs

• Other expenses wholly and exclusively incurred in the production of your gross income

You can also claim capital allowances for any capital expenditure incurred in your activities as an influencer.

Your Tax Responsibilities

As a social media influencer, you are responsible for:

• Reporting all your income: You must declare all income received from your activities as an influencer in your annual tax return.

• Paying your taxes: You are required to pay income tax on your chargeable income at the prevailing tax rates.

• Keeping proper records: You must keep complete and accurate records of all your income and expenses for at least seven years.

Need Help?

Understanding your tax obligations as a social media influencer can be complex. If you have any questions or need assistance with your tax planning, please do not hesitate to contact us.

Whatsapp us: 011 2366 5233

Disclaimer: This article is for informational purposes only and does not constitute professional tax advice. Please consult with a qualified tax professional for advice tailored to your specific situation.

Reference: Lembaga Hasil Dalam Negeri Malaysia. (2026, January 14). Guidelines on Tax Treatment on Income of Social Media Influencer. https://www.hasil.gov.my/media/vtllnhxu/20260114-guidelines-tax-treatment-on-income-of-social-media-influencer.pdf

Employer's Compliance Guide: Your 2026 Checklist for Malaysian Tax Rules

Employer's Compliance Guide: Start 2026 Right

As we step into 2026, it's the perfect time for employers to review their compliance checklist. This guide serves as a friendly reminder of your key obligations to the Inland Revenue Board (LHDN), including an important clarification on when to file Form CP22A for departing staff.

1. For New Hires in 2026

1.Stamp the Employment Contract: All employment contracts must be stamped with a RM10 duty within 30 days of signing.

2.Submit Form e-CP22: Notify LHDN of new hires within 30 days via the mandatory e-CP22 portal, especially if the employee is likely to be taxable.

2. For Departing Employees: When is Form CP22A Required?

This is a common point of confusion. You are NOT required to file Form CP22A for every resigning employee. The key is whether the employee's income has been consistently reported via Monthly Tax Deductions (MTD/PCB).

You are generally EXEMPT from filing Form CP22A if:

• The employee's income has been subject to MTD/PCB, AND

• They are not receiving any lump-sum payments like gratuity or compensation for loss of employment.

You MUST file Form CP22A (via e-SPC) if:

• The employee's monthly income was below the MTD threshold (and thus no MTD was ever deducted).

• The employee is receiving a final payment of compensation or gratuity upon termination.

•T he employee is a foreign worker leaving Malaysia (use Form CP21).

When in doubt, it is always safest to file. If you do file, you must withhold all final payments until you receive the Tax Clearance Certificate from LHDN.

3. Annual & Monthly Obligations

• Form E (Annual Return): The statutory deadline is 31 March (or 30 April for e-filing).

• Form EA (Staff Remuneration): Provide to all employees by the last day of February.

• MTD/PCB (Monthly Deduction): Remit by the 15th of the following month.

A Partner in Compliance

Understanding these nuances is key to efficient compliance. We're here to help you navigate these requirements with confidence.