THE Inland Revenue Board (LHDN) has flagged 5,800 individuals for failing to submit tax returns involving undeclared income totalling RM484 million as of July 2025.
LHDN chief executive officer Datuk Dr Abu Tariq Jamaluddin said the cases involved various groups, including online business operators, commission earners and buyers of high-end vehicles, who had previously proven difficult for tax authorities to trace.
“To address this, individuals earning income beyond regular salaries, such as rental, directors’ fees or irregular earnings, will begin receiving CP500 instalment notices that correspond with their actual income,” the New Straits Times quoted him saying.
He added that LHDN would also begin issuing DG Direct CP205 notices to companies attempting to lower their tax estimates despite strong financial performance.
“This is a strategic step to ensure fairness and curb sophisticated forms of non-compliance,” said Dr Abu Tariq.
He noted that LHDN’s detection capabilities have significantly improved with the broader implementation of e-Invoicing, allowing for more accurate risk profiling and targeted enforcement.
“With more comprehensive e-Invoice data, LHDN now has an enhanced ability to carry out risk profiling and targeted detection,” he said at an engagement session with local trade chambers and business associations.
Under the third phase of the e-Invoicing rollout, businesses with annual revenue between RM5 million and RM25 million are now participating in the system. So far, 493 million e-Invoices have been issued, involving around 100,000 taxpayers.
“That number is expected to continue rising ahead of the implementation of phases four and five, scheduled for 1 January and 1 July next year respectively,” he said.
Dr Abu Tariq also announced that Malaysia will implement the Global Minimum Tax (GMT) for financial years beginning on or after 1 January 2025. The measure will apply to multinational enterprise groups with annual revenue of €750 million or more.
“The first reporting is expected on 30 June 2027, and the current GMT rate is set at 15 per cent,” he stated.
Malaysia is among 136 jurisdictions identified by the Organisation for Economic Co-operation and Development (OECD) as ready to adopt the GMT framework.
The tax reform aims to minimise profit shifting, curb base erosion, and ensure that multinational corporations pay their fair share of taxes in jurisdictions where they operate. - August 27, 2025
