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Updated Frequently Asked Questions (FAQs) pertaining to WHT on payments made to agents, dealers and distributors (ADDs)
The IRB has published on its website the updated version of its FAQs document in relation to Section 107D of the ITA, which provides that companies making payments in monetary form to ADDs arising from sales, transactions or schemes will be required to withhold tax at a rate of 2% on the gross amount. The FAQs document is in Bahasa Malaysia, titled “Soalan Lazim Berkaitan Potongan Cukai 2% Terhadap Pembayaran Oleh Syarikat Pembayar Kepada Ejen, Pengedar Atau Pengagih Di Bawah Bajet 2022”, and is dated 19 August 2022.
Some of the key changes are outlined below.
- The FAQs were updated mainly to reflect the IRB’s media release dated 9 July 2022 announcing the following administrative requirements (see Tax Alert No. 14/2022):
- Effective 1 July 2022, companies making payments to ADDs are required to compute the total WHT applicable for a specific month (i.e., on a monthly basis) and remit the accumulated amount to the IRB by the end of the following month. Examples have also been provided in the updated FAQs to demonstrate this.
- Companies are required to submit the latest Form CP107D – Pin 2/2022 and Appendix CP107D(2) to the relevant IRB payment centres, by e-mail, before remitting the WHT. A copy of the e-mail must be presented to the payment centre for verification and checking purposes when the WHT payment is made.
The e-mail addresses of the respective payment centres are as outlined below:
- Kuala Lumpur payment centre: pbkl-cp107d@hasil.gov.my
- Kuching branch: pbkc-cp107d@hasil.gov.my
- Kota Kinabalu branch: pbkk-cp107d@hasil.gov.my
- There is no longer any restriction to the number of ADDs that can be listed in the Appendix CP107D(2) (it was previously capped at 20 recipients).
- The updated FAQs clarify that official receipts for the WHT payments will be issued to all payer companies. Previously, the FAQs stated that official receipts would be issued only if the payments were made at the IRB’s payment centres (i.e., excluding payments made by post).