Tax Audit Defence in Kuala Lumpur

An LHDN tax audit is a review by the Inland Revenue Board of Malaysia to check that your tax returns are correct and complete. It can be a desk audit handled through correspondence or a field audit at your business premises. Most audits are routine, and you have the right to appoint a licensed tax agent to handle it for you.

Common triggers include unusual financial ratios, large or sudden changes in income or expenses, consistent losses, late or inconsistent filings, and industry-wide reviews. Some selections are simply random.

Do not reply in a hurry. Note the deadline, gather the letter and your filings, and speak to a licensed tax agent before you respond. What you say and submit early shapes the whole case.

LHDN can generally review up to 5 years of assessments, and there is no time limit in cases of fraud, wilful default, or negligence. This is why keeping 7 years of records matters.

It depends on the number of years under review, the issues raised, and how complete your records are. Desk audits usually close faster than field audits. Prompt, consistent responses and clean documentation shorten the process.

Yes. A MOF licensed tax agent can be appointed to act for you, manage correspondence, and attend meetings with LHDN on your behalf. See what an approved tax agent can do that accountants cannot.

Penalties depend on the nature of the understatement and your level of cooperation. They are generally lower where there is voluntary disclosure and full cooperation, and higher where there is concealment.

Voluntary disclosure is telling LHDN about an error before they find it. It often reduces penalties compared with waiting for an audit to surface the same issue. We advise whether and how to disclose.