PUTRAJAYA, June 30 — The Inland Revenue Board (LHDN) will no longer accept the two per cent tax deduction involving deceased agents, dealers, or distributors (Resident Individuals) (EPP), effective August 1.
It said the decision was made as the term ‘individual’ under Section 2 of the Income Tax Act (ACP) 1967 is defined as a living person or ‘natural person’.
“Therefore, if an EPP has passed away, they are no longer categorised as an individual under this provision.
“In the event that income is still received after the death of the EPP, it must be managed by the executor, administrator, heir, or legal representative and reported under the Deceased Person’s Estate (TP) file,” LHDN said in a statement today.
The executor, administrator, heir, or legal representative of the deceased must register the TP file at any LHDN office by completing the Notification of Taxpayer’s Demise (CP57) form and submitting supporting documents, including a copy of the death certificate and the grant of probate or letter of administration.
In this regard, it advised the paying company as well as the heirs’ representatives or estate administrators to take note of the ruling and act accordingly in managing the deceased’s income, in line with existing tax laws and procedures.
For users’ convenience, Form CP57 can be downloaded from its official portal at https://phl.hasil.gov.my/pdf/pdfborang/Borang_CP57_1.pdf.
According to LHDN, under Section 107D of the ACP 1967, companies are required to make a two per cent tax deduction on cash payments to a deceased EPP.
The deduction applies to resident individuals who have been appointed by the paying company as EPPs and who receive payments from sales proceeds, transactions, or schemes carried out in that capacity.
— Bernama
