Bermuda has been named as one of the locations Malaysian citizens have been stashing cash and avoiding tax obligations, according to the country’s tax authority, Lembaga Hasil Dalam Negeri (LHDN) Malaysia.

Malaysia’s Inland Revenue Board said it had identified thousands of tax residents with unreported income through a combination of international information-sharing arrangements and domestic e-invoicing reviews.

LHDN said it had identified 14,858 Malaysian tax residents with more than RM10 billion (about $2.5 billion) in aggregate balances held in foreign financial accounts who had not filed income tax returns.

The identification followed the exchange of financial account information with more than 100 jurisdictions, aimed at addressing cross-border tax non-compliance.

The board said the accounts were held across several jurisdictions, including Luxembourg, Hong Kong, Guernsey, the Cayman Islands, the Bahamas and Bermuda.

LHDN said it had issued reminder notices to the affected taxpayers as part of a voluntary compliance approach to give them an opportunity to review and declare income before the agency takes enforcement action.

Separately, LHDN said that reviews conducted using Malaysia’s e-invoicing system had led to the back-reporting of RM1.4 billion in previously unreported income, contributing RM290 million in tax revenue. The e-invoicing system, introduced in August 2024, has generated nearly one billion electronic invoices to date, the board said.

LHDN said the measures formed part of broader efforts to strengthen tax governance through data-driven oversight and digitalisation. It encouraged taxpayers to make sure their filings were accurate and up to date to avoid penalties.

• For the LHDN statement in the original Malaysian, see Related Media

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