(Updated 26 November 2024)
DEFINITION OF AGENT, DEALER, OR DISTRIBUTOR (ADD)
| No. | Question | Response |
| 1 | Who qualifies as an ADD for this provision? | An individual resident authorized by the company to act as an ADD and who receives payments from sales, transactions, or schemes. |
| 2 | Are sole proprietors included? | Yes. Sole proprietors are considered individuals under this rule. |
| 3 | Are individual partners in a partnership included? | Yes. If payment is made to the individual partner, the 2% WHT applies. Payments made to the partnership entity are excluded. |
| 4 | Are LLPs, Sdn Bhds, and associations included? | No. They are not treated as individuals for the purpose of this rule. |
THRESHOLD VALUE FOR 2% WHT
| No. | Question | Response |
| 1 | What is the condition for ADDs to be subject to the 2% WHT? | The WHT applies in the current year if the ADD received over RM100,000 (cash and/or non-cash) from the same company in the preceding YA. |
| 2 | What is the threshold value? | RM100,000 per year (inclusive of cash and non-cash). |
| 3 | Is the threshold determined per company or in total from all companies? | Per company. Example: If Agent A received: – RM150,000 from Company B (Subject to WHT) RM80,000 from Company C (Not subject) RM101,000 from Company D(Subject to WHT) |
| 4 | Is the threshold assessed yearly or just once? | It must be assessed every year by the payer company. |
| 5 | If the ADD was not a tax resident in the prior year but becomes one in the current year, does WHT apply? | Yes, if the payment in the prior year exceeds RM100,000. Tax residency in the prior year is not relevant for threshold determination. |
PAYMENT & REPORTING BY PAYER COMPANIES
| No. | Question | Response |
| 1 | When must the 2% WHT be paid to LHDN? | – Payments from 1 Jan – 30 Jun 2022: within 30 days – From 1 Jul 2022 onwards: by the last day of the following month. |
| 2 | How to submit Form CP107D? | a) Manual submission: – Download form from LHDN website > Forms > CP107D – Email completed form to pbkl-cp107d@hasil.gov.my – Bring email confirmation when paying. b) Online via MyTax (e-107D): – Only for directors or authorized company reps – User guides are on the MyTax portal. |
| 3 | How is payment made? | a) By hand or post to LHDN HQ, or b) Online via ByrHASiL at MyTax |
| 4 | Must ADDs have a tax number (TIN)? | Yes. They can register via e-Daftar on MyTax. |
| 5 | How to report multiple recipients in CP107D? | Use Appendix CP107D(2). Online users can click “Add Recipient.” |
| 6 | Is there guidance available? | Yes. Available under Bill 38. Form CP107D on the LHDN website. |
| 7 | Will LHDN issue official receipts? | Yes, once payment is received. |
| 8 | Must the 2% WHT be included in Form CP58? | Yes. CP58 has been updated to include it. |
| 9 | How will the 2% WHT affect the ADD’s annual tax return? | It will be treated as part of tax paid and credited in their BE/B/BT tax return. |
| 10 | If the ADD is already paying CP500 instalments, is 2% WHT still required? | Yes. CP500 is the ADD’s responsibility. The 2% WHT is the company’s obligation. |
| 11 | If a commission was earned in Dec 2021 but paid in Jan 2022, is WHT applicable? | Yes, WHT applies in 2022 if the ADD’s total payment in 2021 exceeded RM100,000. |
