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Contrary to popular assumption, the Internal Revenue Department (LHDN) doesn't just go after wealthy titled individuals as seen in the recent investigation of several Tan Sris and Datuk Seri over tax evasion.

LHDN's target is not just an individual living a wealthy lifestyle but other clues as well that are tell-tale signs of a person under-declaring their income.

Our Managing Partner, Koong Lin Loong revealed there is a ten-point criteria used by LHDN, he said in a recent interview to Sin Chew Daily.

"Whether a person is evading tax is normally assessed with the ten-point criteria, and assets of unidentified origins will be their focus of investigation," he explained that taxpayers must ensure that their accounts are clear and that they are up to date in their financial record-keeping.

Koong outlined the following ten-point criteria used by LHDN to assess whether an individual is a potential tax evader:

  1. Investing in and possessing a large number of properties
  2. High rental income
  3. Frequent purchase and disposal of properties
  4. High media exposure but unproportionately low declared income
  5. Possession of luxury cars and bidding of special plate numbers
  6. Most businesses declared as loss-incurring
  7. High dividend income
  8. Shareholder of many companies
  9. Frequent and generous donations
  10. Reported by third party individuals

LHDN has also listed down the types of offences which are liable to fines and penalties under the Income Tax Act 1967.

You can access the complete list of offences here