Query on Employment Pass & Tax refunds

Hi All

Below are the issues which i need a clarification

1) What is the minimum time period of employment pass is it 1 year, 2year or 3 years

2) Is it necessary to have a bonding period during the employment pass tenure

3) Will I get my tax refunds if i leave the company after 6 months, do I need to inform the company to file the returns or is there any process which has to be done from my end

4) Does my employer gets any refund in case my EP is cancelled

The minimum time depends on the category but is 1 year (for both Professional EP and Foreign Worker EP)

Question 2 - not sure what you mean - are you talking about a probationary period?  Depends on the terms of employment agreed. There is not usually one for FWEP

The company must deduct your tax each month and submit it to the inland revenue HASIL. If you qualify to be tax resident, when you leave (the country) after 183 days your tax clearance process as a departing employee (company should do this) will sort out if you are entitled to a refund.

The employer gets nothing but headaches if your PEP is cancelled and has to pay a fee to get the immigration sorted out plus the tax paperwork. They may also not give a No Objection letter if the employee want to join another company. They are not obliged to cooperate. This can block future employment in Malaysia.

Moral of the story - play nice with Malaysian employers unless you want problems.

Thanks Gravitas for Instant reply

There is one more query which I need to ask

1) As said I am supposed to get my tax rebate if I leave the country after 183 days but what if I dont have an employment pass during my exit from the country, The reason why I am asking this is beacuse I have been working here since 5 months and I still dont have an EP and i dont think the EP will be provided even after coming 3 months

If you don't have an employment pass the employer can't register you to pay income tax? They seem to be employing you illegally and potentially cheating you if they are deducting tax.  Ask them for your tax number then contact your nearest HASIL office (here is  link where there are lists of branches http://www.hasil.gov.my/bt_goindex.php? … ;bt_sequ=1). You can check if it is a valid number and the status regarding deductions being made, i.e. whether they are being submitted to HASIL.

Getting out the country as you have overstayed needs special action. I suggest you do it sooner rather than later. You need to follow the instructions here:

Division: Enforcement

Malaysia Immigration Department Headquarters
Level 4 (PODIUM)
No 15, Persiaran Perdana, Precinct 2
62550 Putrajaya Federal Territory

Phone no: 03-88801298
Fax no : 03-88801310

Necessary Steps to take:
i. Surrender immediately to the Enforcement Division, Immigration Department of Malaysia;
ii. Do not use the service of middlemen or agents;
iii. Give full cooperation during the investigation and recording of statements by an Immigration Officer.

You needed a Visa with Reference to enter Malaysia to work. Sounds like to just followed the employer's instructions and they never had the right to employ you in the first place. Do not be merciful just report them with full details.

Hi Gravitas

Thanks for every feedback which has been given, But I have some serious concerns now which i would like to share

As said I have been working here since five months and my tax is deducted every month I would like to leave this job if my EP is still not provided till the end of this month, Kindly advice how can I recover my tax deductions in which my employer has made.

If your EP is not approved how will they register with LHDN. The only way to recover the tax you have been deducted is to talk to your employer. Have you discussed the status of your EP?

Yes I have spoken about my EP and they say its in process & I am hearing this from past 5 months

If they will not return the deductions then you will need to make a Police Report and inform them that this is what you will be doing as they are fraudulently treating you. If you choose to do this, it should be at the same time as you report to immigration to get exit clearance.

Hi Gravitas & Shehajaz

Kindly explain this scenario

Now I have worked here for 5 months and I am putting down my papers, I would have to serve 3 months notice period with my employer

so, in this case, will I be getting my tax rebate or not

You must understand..since your company did not get an EP for you..they wouldnt be able to register you with LHDN. So getting your tax rebate really depends on your company and not the government..

Thanks Shehajaz

I have couple of more queries on employment pass hope you can help me out

1) As per my employer the employment pass validity is minimum 3 years not less then that want to know how true this fact is ?

2) As per my employer if I leave the organisation within 3years I will be liable to pay the Employment Pass fees that which goes to 5500 RM  again I would like to know is the term of EP  And is it legal to recover this amount even if I serve the notice period

3) I think I have asked the question before that does my employer get refund of EP  fees  in case if the employee leaves the organisation before the expiry of employment pass and if the EP is cancelled

The contract you signed accepting the job is the legal document detailing the terms that apply to your recruitment - read it carefully.

Rubbish - your employer is telling you more lies - an EP can be as little as 1 year. It is up to the employer to offer the length of contract that is appropriate for the job to be done.

This is the official guide to immigration processing - https://esd.imi.gov.my/portal/pdf/TC-ES … r-2017.pdf

Unless it says so in the contract you signed, you don't have to refund any fees.

No, the fee the employer has "paid" is their responsibility and normally there would be no refund. However, It is up to what they agreed with the Agent if they get a refund if it is not possible to obtain an EP.

You have the option to make a police report on the grounds of "cheating" if they have deducted tax but not paid it to LHDN.  However, it is a can or worms because you are an illegal immigrant in Malaysia and should now go immediately to immigration in Putrajaya to report you have overstayed or entered the country without following due process http://www.imi.gov.my/index.php/en/main … aysia.html

You may well get a 5 year blacklisting when you are deported but the Police Report about the company might save you that embarassment. If you try to get another job without exiting you will probably end up with similar problems.

What is the difference between companies which are registered under MSC or ICT status?

Especially when the rule of providing an employee pass

To be more precise Does an employee need to be outside Malaysia before getting the employment pass or there is any rule change in the above-given company status

Hi Gravitas

Any feedback on this

Everyone needs to be outside Malaysia while the request is submitted and the approval is given.

A Visa With Reference (single entry issued by Malaysian consulate in current country) is also required to enter and take up employment for those that require a visa to enter Malaysia ordinarily.

Indian citizens require a medical and security clearance as well.

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