CP58 Explained: Why Every Property Agency Must Issue It — and Why Every Agent Should Care
Most real estate negotiators in Malaysia are familiar with commission statements, but far fewer understand CP58 — the official tax reporting document required by LHDN for agents, dealers, and distributors.
This single document is:
- A legal requirement for agencies
- A tax protection record for agents
- The only official proof of total commission and incentives received
- Necessary for claiming tax credits when 2% WHT is deducted
If an agency fails to issue CP58, both the company and its agents are exposed to unnecessary tax risk.
1. What Is CP58?
CP58 is an annual statement issued by a company to an agent showing:
- Total commission paid (cash)
- Total incentives or benefits given (non-cash), such as trips, cars, gadgets, rewards
- Total withholding tax (WHT) deducted and remitted to LHDN
Non-cash benefits must be declared at their fair market value.
For example:
| Incentive Type | Value Shown in CP58 |
|---|---|
| Overseas trip reward | RM18,500 (ticket + hotel cost) |
| iPhone given as incentive | RM4,999 (retail value) |
| Travel voucher | RM20,000 (printed value) |
Many agents are unaware that a free trip or gadget is still taxable income, and CP58 is the document that legally records it.
2. When Is CP58 Required?
A company must issue CP58 if:
- It pays commission, incentive, bonus, or referral fees
- To an individual who is not an employee
- And the total amount (cash + non-cash) exceeds RM5,000 in a calendar year
This includes:
| Payment Type | CP58 Required |
|---|---|
| Commission to REN | Yes |
| Override given to team leader | Yes |
| Incentive trip or prize | Yes |
| Referral fee to introducer | Yes |
| Salary to employee | No (covered under EA Form) |
3. Why Agents Need CP58
CP58 is essential because it:
- Confirms your total commission and perks for the year
- Allows you to legally declare income to LHDN
- Enables you to claim the 2% WHT that was deducted from your commission
- Helps with home loan or car loan applications as proof of income
- Protects you from future tax disputes or audits
Without CP58, an agent cannot claim tax credit for WHT that was already deducted.
4. Why Agencies Must Issue CP58
Under the Income Tax Act and Public Ruling 11/2018:
- CP58 must be issued by 31 March every year
- Failure to issue can result in penalties under Section 120(1)
- LHDN can disallow the agency’s commission expense claims if CP58 was not issued
- A missing CP58 record may be treated as hidden or undeclared commission payout
In short: No CP58 means non-compliance, audit exposure, and financial penalties.
5. CP58 vs EA Form
| EA Form | CP58 |
|---|---|
| For employees (salary) | For agents (commission) |
| Includes PCB and EPF | Includes commission, incentives, WHT |
| Submitted by employer to LHDN | Used by agent for self-filing |
| Based on payroll | Based on commission statements |
A real estate negotiator is not an employee. Agents do not receive EA Form. They receive CP58 instead.
6. How CP58 Protects the Agent
- Provides a clean, legal record of income
- Strengthens borrowing power with banks
- Allows accurate tax filing and refund eligibility
- Avoids backdated tax, penalties, and investigations
Agents who avoid CP58 are usually trying to avoid tax. Agents who insist on CP58 are building a credible financial track record.
7. Best Practices for Agencies
- Auto-generate CP58 instead of manually preparing it
- Issue before 31 March every calendar year
- Include WHT deductions clearly
- Keep a 7-year archive in case of audit
- Never pay commission “off-record” outside the system
Using a dedicated system like ListingMine ERP, which automatically tracks commission, WHT, and non-cash benefits, allows agencies to produce CP58 instantly and keep the entire process audit-safe — without admin burden or spreadsheet risks.
Final Message
CP58 is not just a form. It is the official bridge between commission income and legal tax reporting.
Agents who receive CP58 are protected
Agencies who issue CP58 are compliant
The industry moves toward transparency and proper financial governance.
If you are an agent, always request CP58.
If you are an agency, always issue CP58.
