Malaysia Section 107D Withholding Tax for Agents, Dealers & Distributors: 2026 Guide

A Guide by HTL & Co Chartered Accountants in Malaysia

Last updated: 4 Aug 2026

Quick answer: Under Section 107D of the Income Tax Act 1967, a company must generally deduct 2% from monetary payments made to a resident individual agent, dealer or distributor when that recipient received more than RM100,000 in total monetary and non-monetary payments from the company in the immediately preceding year. For payments made from 1 July 2022 onward, the company must remit the deduction to LHDN no later than the last day of the following calendar month.

Who is subject to Section 107D?

The rule applies when all of the following conditions are met:

The payer is a company.
The recipient is a resident individual acting as an agent, dealer or distributor.
The payment arises from sales, transactions or schemes carried out by that recipient.
The recipient received more than RM100,000 in aggregate monetary and non-monetary payments from the company in the immediately preceding year.

The RM100,000 test determines whether Section 107D applies. Once it applies, the 2% deduction is made from qualifying monetary payments.

Rate and payment deadline

Requirement	Current treatment
Withholding-tax rate	2% of the qualifying monetary payment
Recipient threshold	More than RM100,000 in total monetary and non-monetary payments in the immediately preceding year
Remittance deadline	No later than the last day of the following calendar month
Current online submission channel	e-107D through the MyTax portal

How to submit Section 107D withholding tax now

The 2022 email-submission instructions are no longer the current online procedure. Companies should use e-107D through the MyTax portal. The service allows an authorised director or director representative to complete the Section 107D payment form, add recipient details or upload the CP107D(2) attachment, generate the bill number and proceed with payment.

Log in to MyTax using the appropriate company role.
Open e-107D under the ezHasil services.
Complete the payer, recipient and payment details.
Add each recipient or upload CP107D(2), as applicable.
Generate the bill number and arrange payment by the last day of the following calendar month.
Retain the submission acknowledgement, payment evidence and recipient reconciliation.

Records companies should maintain

Annual payment totals for each agent, dealer and distributor, including non-monetary benefits.
Confirmation of the recipient’s Malaysian tax-residence and individual status.
Payment and crediting dates used to calculate the applicable month-end deadline.
e-107D submission records, CP107D(2) details, bill numbers and payment receipts.
A reconciliation between commission records, ledger balances and amounts reported to LHDN.

Common compliance mistakes

Applying the RM100,000 threshold only to cash payments and ignoring non-monetary benefits.
Using a fixed 30-day period instead of the calendar-month deadline that applies to payments from 1 July 2022 onward.
Continuing to send forms to the 2022 payment-centre email addresses.
Failing to obtain the correct MyTax company role before a payment is due.
Not reconciling deductions by recipient and payment date.

Official references

This article provides general information and should not replace advice based on a company’s payment arrangements and recipient records.

HTL can assist with Section 107D reviews, recipient reconciliations and tax-compliance procedures. Contact HTL or learn more about our tax advisory and compliance services.