When an employer receives the tax clearance certificate, he/she is to release your money which he/she withheld from you upon settling of your tax balance as shown in the tax clearance certificate.
An employer usually withholds your money, salary, or compensation, because he/she is mandated to do so by the Malaysian tax law until you clear your outstanding taxes and get the tax clearance certificate.
Otherwise, failure to do so, they will face the penalty charges. The submission of the duly filled clearance forms can be done manually by visiting the LDHN offices or online through the e-SPC and is to be done by the employer.
There are three different forms, depending on the employee’s employment status.