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Friday, 19 July 2013

tax clearance | The Oranje Tag

tax clearance | The Oranje Tag:

'via Blog this'

I read this the day I told IBM that I would rather leave and they gave me money to shut up and leave.

I did not realize how true and how frustrating this process would be.

In a nutshell Malaysian Expats, expatriates, fixed term hires etc:

You join Malaysia on an Employment Pass. To get this pass you have to hang a round in Malaysia until the process completes. There is a Spanish word for this: Man(j)ana.

Once this is done you have to LEAVE Malaysia, Singapore is ok, and re-enter with the new work visa.

Here is the kicker. If you company gets rid of you, for whatever reason, they will call immigration and tax and cancel your EP pass. You then have SEVEN (7) days to leave the country to country of origin, not Singapore! In some cases immigration will call your local police station and they will endorse your passport. IF YOU EVER OVERSTAY IN MALAYSIA YOU WILL BE BLACKLISTED AND MAY GO TO JAIL AS WELL. No jokes!

So imagine you get a lumpsum payout. All is well you think, I will have my last months salary so I can cover commitments and get a ticket. NOT! Your company will lock out ANY money owed to you until you get Tax clearance.

Hasil, (tax office) takes 2 weeks to process your form. Let me explain this to you. It takes them 2 weeks to GET to your form and start processing! If you have been in Malaysia for a few years they will immediately order a tax audit. Oh what fun! Good luck finding the receipts for all your claims for books and gym stuff.

The bottom line? Stay for at least 3 years, eat the shit from your employer, apply for a 10 year Talent Pass, get a letter of No Objection form your employer (kinda like pulling teeth) and submit your 3 years of tax payments AND your contributions to Malaysian society. Fortunately I am a public speaker and did lots of Opensource talks for Mampu and MDEC.  

I have an RP so no issue and Tax clearance. Malaysia is a very nice place to live with amazing people but the Visa situation is a real worry.

Anyway, the quoted article is true.


Exit Clearance : Procedures and tips

May 8, 2012
These are tips and processes I’ve gone thru to get my exit clearance from my last company. This will be very short and straight forward. This is to give you idea how you are going to process yours when the time to say goodbye comes along your way.
1. Send an email of resignation to your immediate supervisor and HR manager. Your resignation letter doesn’t need to be so detailed, just mention your last day and how you can be of assistance during the transistion. As foreigner, we have 2 months notification. (Duration: 0.5 day)
2. Print a copy of the resignation letter and personally pass it to your immediate supervisor. If he is busy, leave his copy on his desk. Your immediate supervisor will then make himself available for your one-on-one discussion. He’ll ask what he can do to change your decision. If your decision is FINAL make sure he signs your resignation letter and personally pass it to HR manager. (Duration: 2 days)
3. Once the letter is received by the HR personnel, wait for the Letter of Acceptance. This is a letter that states the company has accepted your resignation and indicates the last day of your stay to the company. The letter also tells you how much leave is left, or if you have other accountabilities with the company such as training bond and loan balances.
4. Very important note to all readers. the HR personnel will tell when you are going to get the Letter of Acceptance. Make sure you don’t only receive that Letter. You will need to receive the following documents because the next step is the Tax Clearance wherein they will require you the following documents:
A. Letter of Acceptance – the HR will prepare
B. CP 21 or Leaver Form – the Payroll/ Finance will prepare. This is a document indicating the  assumption of the tax due to you on the next 2 months.
C. BE – Form (example BE 2012) – tax form for the current year. Make sure you use the BE-Form which is for “resident”Payroll/Finance will prepare this.M-Form is for “non-resident”
There was a wrong information from the Finance during my processing when they told me I will be taxed as “non-resident” or 26% because I have not stayed more than 182 days for the current year. This is WRONG! I am not sure how come the Finance manager doesn’t know the Taxation law that applies to foreigner like me. Anyway, here is very good link about Malaysia’s Taxation Law.
D. In-Out in Malaysia - prepare the list of your Arrival and Departure dates in Malaysia from your existing passport. This is a simple excel form where you will list out the dates and number of days you were inside and outside Malaysia. Make sure you understand your “resident” status based on the link provided to you.
E. Photocopy of all pages of your passport including cover page – you will prepapre this
Documents A to C will depend on the availability of the concerned party to attend. Be ready to hear tons of excuses. Based on my assessment and experience it will take about 3 days to complete. Don’t get tired of making a follow-up. They need to be pushed.
5. Once you have completed the above documents, now is the time for you to file those documents to the Tax Office. Upon assessment, the Officer will give you a photocopy of the CP21 or Leaver Form with rubber stamped on it. Keep this copy for yourself.
The tax officer will advise you when you will make a follow-up and whether you want to pick-up the Tax Clearance Letter yourself or they will mail it to your home address.
The processing time is 7-15 working days. If you’re still in Malaysia, better claim the letter back to the Tax Office. The Tax Letter is a document that tells the employer how much tax is due to you.
Do not wait to receive calls, call them. I made a follow-up on the 4th day and luckily i got it on the 5th day. (Duration: maximum 7 days)
6. When you claim the Tax Clearance Letter, make sure you get 2 copies. 1 copy is for the employer and the second copy is yours. (Duration: 0.5 day)
7. Next thing you have to accomplish is the cancellation of your working visa. Submit your Itinerary details and your passport to HR personnel. (Duration: 3 days)
8. On your last day, you will have to complete the Company Clearance Form. It is basically a checklist of items you have to return to the company such as ID, health card, tools, laptop, and locker key. Once done, make sure you get a photocopy too. (Duration: 0.5 day)
Inspite of the early processing of my clearance I still failed to get my last pay on my last day. Learning from the past experieces from other colleagues, if you have gone back to Philippines without getting the Tax Clearance, it is very unfortunate that your last pay will be hold FOREVER!
One colleague, waited more than 4 months (he resigned last January) because they haven’t received the Tax Clearance Letter. With some assistance from yours trully, I was able to get his Tax Clearance when I filed mine. That was the only the time they attended to his last salary details which up to my last day they haven’t prepared completely.
To all my friends, my experience is just an FYI. This doesn’t mean it will happen to you too. Hopefully it will improve.

1 comment :

  1. I read you post and the guidline you have provided is reliable. I am in the same situation and i think this is a standard process for all employer/employee's action while operating/working in Malaysia. The only difference in my case compared with what you've done is I applied for cancellation of my work permit before headed to LHDN (Hasil). That is also possible and during tax filing you can also declare in the "ins & outs form" your last dayt in Malaysia. To sum up, as long as your CP21 is ready and you have the complete passport copy including the excel record of ins and outs in Malaysia, it would help your application faster and smoother. Now, i'm waiting for my tax clearance and as per their advice, it would take 10 days. Thanks for the shared experience. Pinoy here too. All the best kabayan!


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