Tax compounds are penalties imposed by the Inland Revenue Board of Malaysia (LHDN) for offences such as late filing, failure to submit tax returns, incorrect declarations, or non-compliance with specific tax requirements. While compounds are legally enforceable, they are not always fixed in amount and may be subject to negotiation depending on the circumstances of the case. Many taxpayers are unaware that compounds can be reviewed or reduced when supported by valid explanations, proper documentation, and a clear compliance track record.
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Review of compound notices issued by LHDN to determine the nature of the offence and applicable legislation
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Assessment of the factual background and compliance history of the taxpayer
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Identification of mitigating factors such as voluntary disclosure, administrative errors, or first-time offences
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Preparation of written representations requesting reduction or reconsideration of compound amounts
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Supporting submissions with relevant documents, timelines, and factual explanations
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Direct engagement and negotiation with LHDN officers handling the compound matter
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Advisory on settlement options and payment arrangements where applicable
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Guidance on corrective actions to prevent future non-compliance and repeat penalties
Our Tax Compound Negotiation Services are handled by experienced tax professionals who understand LHDN’s enforcement practices and internal discretion thresholds. With former senior tax officials on our team, we are able to assess realistically whether a compound is negotiable and how best to position the case. We focus on presenting well-reasoned, fact-based submissions that demonstrate genuine compliance intent while addressing the underlying issues that led to the offence.
Proper handling of tax compounds can significantly reduce financial impact and prevent escalation into more serious enforcement actions. If you have received a compound notice from LHDN, professional assistance can help ensure the matter is addressed strategically, fairly, and in accordance with Malaysian tax laws.
