Do you know IRB is going to digitise everything ie terminating manual submission and payment?

Starting 1 January 2025, the Inland Revenue Board (IRB) mandates the electronic submission of the e-107D form for 2% withholding tax (WHT) on payments to agents, dealers, or distributors under Section 107D of the Income Tax Act 1967.

What is e-107D?

Under Section 107D of the Income Tax Act 1967, companies making payments to agents, dealers, or distributors (ADDs) who are resident individuals must withhold 2% of the payment as tax.

This applies to payments arising from sales, transactions, or schemes carried out by the ADDs.

The withholding tax is applicable if the ADDs have received more than RM100,000 from the same company in the preceding year.

The withheld tax is treated as an advance tax and is deducted from the ADDs’ balance of tax to be paid when they submit their income tax return.

Payments in the form of credit notes, discounts, or contra-transactions are not subject to this withholding tax.

Non-compliance risks penalties, so SMEs should prepare for this transition.