CP22A Form — Cessation of Employment (Malaysia)

A CP22A Form — Cessation of Employment (Malaysia) in Malaysia the CP22A form in Malaysia is the official notification instrument prescribed by the Inland Revenue Board of Malaysia (Lembaga Hasil Dalam Negeri Malaysia, LHDN) under Section 83(3) of the Income Tax Act 1967 (ITA 1967), requiring an employer to notify the Director General of Inland Revenue when an employee ceases employment, retires, or is about to leave Malaysia permanently.

The CP22A form serves a critical tax compliance function within Malaysia's Monthly Tax Deduction (MTD) scheme, also known as Potongan Cukai Bulanan (PCB), administered under the Income Tax (Deduction from Remuneration) Rules 1994. When an employee's employment ends, the employer must settle all outstanding PCB obligations and confirm the employee's tax account is in order before the final salary is released. LHDN requires a 90-day retention period under Rule 3 of the 1994 Rules, during which the employer withholds the final payment to satisfy any tax liability the Director General may raise.

The CP22A form is distinct from Form CP22, which is used to notify LHDN of a new employee commencing employment. The CP22A specifically covers cessation, retirement, or pre-departure notifications. A separate instrument, Form CP21, governs the situation where an employee is leaving Malaysia for more than three months under Section 83(4) of the ITA 1967, which imposes a stricter 30-day advance notification requirement.

Employers who fail to submit Form CP22A face prosecution under Section 120 of the Income Tax Act 1967, which carries a fine of between RM 200 and RM 20,000, or imprisonment not exceeding six months, or both. LHDN enforcement through Tax Audit and Investigation under the LHDN Audit Framework 2022 treats late or non-submission of cessation notifications as a trigger for employer tax compliance review. All CP22A submissions for e-PCB employers are lodged through the LHDN e-Filing portal at ezHasil (https://ezhasil.hasil.gov.my).

The legal framework governing the CP22A Form — Cessation of Employment (Malaysia) in Malaysia draws on several key statutes and regulatory bodies. Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Parties executing a CP22A Form — Cessation of Employment (Malaysia) in Malaysia should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Employment Act 1955 (Act 265) sets the foundational requirements.

A CP22A form is required in Malaysia whenever an employee ceases employment, regardless of the reason for cessation, under Section 83(3) of the Income Tax Act 1967.

A CP22A form is required when an employee resigns voluntarily from their position. The employer must submit the form to LHDN within 30 days of the last day of employment and must withhold the final month's salary and any balance of salary for 90 days pending tax clearance, under Rule 3 of the Income Tax (Deduction from Remuneration) Rules 1994.

A CP22A form is needed when an employer terminates an employee's contract, whether by mutual separation, retrenchment under Section 12 of the Employment Act 1955, or misconduct dismissal. The form obligation under Section 83(3) applies regardless of the reason for termination.

A CP22A form is required when an employee retires. Retirement under a registered pension or provident fund — including the Employees Provident Fund (EPF) under the Employees Provident Fund Act 1991 — does not exempt the employer from the CP22A notification obligation, as the cessation of active employment triggers the requirement.

A CP22A form is needed when an employee dies while in service. The employer notifies LHDN of the deceased employee's cessation date, and any final salary payments made to the estate are subject to the same tax withholding obligations under the ITA 1967.

A CP22A form is required when a contract-of-service employee completes a fixed-term contract and the contract is not renewed. Each completion of a fixed-term engagement constitutes a cessation event under Section 83(3).

Parties in Malaysia should prepare a CP22A Form — Cessation of Employment (Malaysia) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.

A complete and compliant CP22A form for Malaysia must include the following elements as specified by LHDN under the Income Tax Act 1967.

Employer details: The employer's full name, income tax reference number (E number), Employer PCB number assigned by LHDN, and the business address registered with the Companies Commission of Malaysia (SSM) or the relevant statutory body. The employer's e-PCB account number from the ezHasil portal is required for electronic submissions.

Employee particulars: The employee's full name as per their Malaysian identity card (MyKad) or passport, the NRIC or passport number, the employee's income tax reference number (SG or OG number), date of birth, and residential address. For non-citizen employees holding Employment Pass or Professional Visit Pass issued by the Immigration Department of Malaysia (JIM), passport details and the pass expiry date must be recorded.

Employment cessation details: The precise date of cessation of employment in DD/MM/YYYY format, the reason for cessation (resignation, termination, retirement, contract completion, or death), and the last date of salary payment. The last day worked and the last pay date may differ where notice periods are served or paid in lieu under Section 12 of the Employment Act 1955.

Remuneration particulars: Total gross remuneration paid in Malaysian Ringgit (RM) from 1 January of the tax year to the cessation date, including basic salary, allowances, commissions, bonuses, and any benefits-in-kind assessable under Section 13 of the ITA 1967. This figure is used by LHDN to assess whether PCB deductions made throughout the year are sufficient.

PCB deduction summary: Total Monthly Tax Deduction (PCB) deducted from the employee's salary from 1 January to cessation date, as computed under the Income Tax (Deduction from Remuneration) Rules 1994. Any PCB arrears or adjustments must be separately itemised.

Final payment withheld: The amount of the employee's final salary or outstanding pay withheld under Rule 3 of the 1994 Rules pending tax clearance notification from LHDN. Employers must not release withheld amounts until the Director General confirms tax clearance or the 90-day retention period expires without LHDN raising an assessment.

Additional compliance elements for a CP22A Form — Cessation of Employment (Malaysia) used in Malaysia include: Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Forms-legal.com provides this template as a starting point for Malaysia-compliant documentation.