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High Net-Worth Individuals and Capital Statements for Tax in Malaysia

Who Is Typically the Focus of This Inquiry?

Who Is Typically the Focus of This Inquiry?

 

1. High net-worth individuals.

2. Directors, shareholders, and senior management personnel within companies.

3. Buyers of high-value assets, including real estate, properties, luxury vehicles, and the like.

4. Purchasers of luxury goods, such as expensive watches and designer handbags.

5. Individuals who have made substantial investments.

6. Those with conspicuous signs of an opulent lifestyle, such as extravagant vacations documented on social media or other sources.

7. Individuals with foreign bank accounts that involve substantial fund transfers in or out of Malaysia.

Who Is Subject to Capital Statements?

High Net-Worth Individuals: Those with substantial financial resources.

Directors, Shareholders, CEOs, CFOs, etc., of Investigated Companies

Individuals with Significant Spikes in Expenditure

Purchases high-value assets, luxury items, or extensive investments.

Individuals Displaying a Lavish Lifestyle

Those who seem to live extravagantly

Individuals with Overseas Bank Accounts

Reports from Whistle-Blowers

What Should I Do If I Receive CP102 and CP103 Forms from the IRB/LHDN?

It is advisable to promptly reach out to your tax agent for assistance. If your tax agent is unable to provide the necessary support, please feel free to contact us.

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Is It Mandatory to Prepare a Capital Statement?

Currently, the preparation of a capital statement is not obligatory. However, it is considered a prudent practice to compile a capital statement on an annual basis.

 

The preparation of a capital statement serves to identify potential financial risks and mitigates them.

 

Through this practice, individuals are more likely to maintain and record their documents and essential information correctly, simplifying the process in case of a tax investigation.

 

Additionally, this practice allows for effective tracking of personal financial affairs and provides a reliable estimate of one’s net worth.

Challenges Encountered in Preparing a Capital Statement

One of the primary hurdles often faced by individuals is the difficulty in producing supporting documents or information for transactions conducted in previous years.

 

Unlike businesses, individuals tend to maintain fewer records related to their personal financial dealings.

 

Upon receiving CP102 and CP103 forms from the Inland Revenue Board (IRB), taxpayers are typically granted a 30-day window to prepare the capital statement.

 

Extensions may be sought, subject to the IRB’s discretion.

 

Due to the time constraints, many taxpayers find it challenging to retrieve historical documents and recollect transactions from years ago.

 

This can place the taxpayer at a disadvantage, as the absence of proper documentation renders them unable to provide justifications or a basis for disagreement with any adjustments made by the IRB.

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Numbers of individul/cooprate seeking consultation

1

Appointment Capital Statement LHDN

Sources

 

  1. Challenges Faced By High Net Worth Individuals in Managing Capital Statements and Tax Compliance – https://www.majalah.com/?classified.challenges-faced-by-high-net-worth-individuals-in-managing-capital-statements-and-tax.GTR3Y5LLN5
  2. Apa itu Penyata Modal atau Capital Statement – https://perwarisanperniagaan.com/penyata-modal-atau-capital-statement/
  3. Capital Statement From LHDN – https://perwarisanperniagaan.com/capital-statement-from-lhdn/
  4. High Net-Worth Individuals and Capital Statements for Tax in Malaysia – https://perwarisanperniagaan.com/capital-statement/
  5. Majalah.com – Capital Statement From Lhdn – https://www.majalah.com/?classified.capital-statement-from-lhdn.GTR3YF26BB
  6. Majalah.com – Apa Itu Penyata Modal atau Capital Statement – https://www.majalah.com/?classified.apa-itu-penyata-modal-atau-capital-statement.GTR3YJZWW5