PUTRAJAYA: The Inland Revenue Board (LHDN) has announced that the two per cent tax deduction for deceased agents, dealers, or distributors (EPP) will no longer apply starting August 1.
The decision aligns with the definition of an ‘individual’ under Section 2 of the Income Tax Act 1967, which refers only to living persons.
LHDN clarified in a statement today that once an EPP passes away, they no longer qualify as an ‘individual’ under tax laws.
Any income received after their death must be managed by the executor, administrator, heir, or legal representative and reported under the Deceased Person’s Estate (TP) file.
The board emphasised that the deceased’s representatives must register a TP file at any LHDN office by submitting Form CP57 along with supporting documents, including a death certificate and grant of probate or letter of administration.
LHDN also reminded paying companies and estate administrators to comply with the new ruling.
Companies are required under Section 107D of the Income Tax Act 1967 to deduct two per cent tax from payments made to living EPPs, but this no longer applies posthumously.
For ease of access, Form CP57 is available for download on LHDN’s official portal at https://phl.hasil.gov.my/pdf/pdfborang/Borang_CP57_1.pdf.
