The following are some frequently asked questions that we often encounter:
How can I tell if my employee already has a tax reference number, or do they need to register?
What is the process for registering a tax reference number online via the MyTax Portal?
What should I do if my employee is a foreign worker or non-citizen and doesn’t automatically receive a tax reference number?
Employers in Malaysia often encounter questions about tax reference numbers—especially when an employee does not yet have one.
A tax reference number (often referred to as a Tax Identification Number or “Nombor Pengenalan Cukai”) is crucial for ensuring proper tax deductions and compliance with the Inland Revenue Board (LHDN). In this article, we outline the importance of a tax reference number and provide step-by-step guidance on how to address this situation.
Understanding the Tax Reference Number
A tax reference number is a unique identifier issued by LHDN to Malaysian taxpayers. For most Malaysian citizens and permanent residents aged 18 and above, registration is automatic using details from the National Registration Department.
However, individuals who are not automatically registered—such as foreigners, non-residents, or new employees—must apply for one.
Having a valid tax reference number is essential because it:
Enables accurate monthly tax deductions (PCB) from employee salaries.
Ensures proper filing of income tax returns.
Helps both the employer and employee remain compliant with LHDN requirements.
Steps to Obtain a Tax Reference Number
If your employee does not have a tax reference number, follow these steps:
Check for Automatic Registration
Verify whether the employee’s details from the National Registration Department have already been shared with LHDN. Malaysian citizens and permanent residents aged 18 or older may have been automatically registered. (refer to LHDN)
Guide the Employee to Register Online
If automatic registration has not occurred or if the employee is a non-citizen, advise them to register using the online e-Daftar system available on the MyTax Portal:
Access MyTax Portal: Visit MyTax Portal.
Select the Appropriate Taxpayer Type: Choose “Individual” as the type of taxpayer.
Complete the e-Daftar Application: Fill in the required personal details and submit the application.(the guide is available on this page or contact LHDN directly for further help)
Processing Time: The application is usually processed within seven working days.
This process not only issues the tax reference number but also allows the employee to later verify it by logging into the portal or checking their individual income tax return.
Visit an LHDN Office (If Necessary)
If the employee encounters issues online, suggest that they visit the nearest LHDN office for assistance with their registration.
The Employer’s Role
While it is the employee’s responsibility to ensure they are registered, employers can take proactive steps to help:
Inform and Educate: Explain to new employees the importance of having a valid tax reference number for proper payroll processing.
Provide Resources: Share links to the MyTax Portal and any internal guides on using e-Daftar.
Follow Up: Confirm that employees have completed their registration before finalizing payroll setups. This will help prevent any delays or discrepancies during the Monthly Tax Deduction (PCB) process.
Special Considerations
Foreign Employees:
For non-Malaysian employees, check if there are specific registration requirements. In some cases, if the employee is not eligible for a TIN, alternative identification (such as passport details) may temporarily be used until the proper registration is complete.
Lost or Forgotten Tax Reference Numbers:
If an employee has previously been issued a tax reference number but cannot locate it, they can retrieve it by logging into the MyTax Portal or reviewing the front page of their income tax return.
Ensuring that every employee has a valid tax reference number is essential for seamless payroll processing and compliance with LHDN regulations. By guiding employees through the online registration process or advising them to visit the nearest LHDN office, employers can help prevent administrative delays and ensure that all statutory deductions are accurately processed.
For more detailed assistance, employees and employers can consult resources provided on the MyTax Portal or reach out to LHDN’s customer care.