But LHDN may still see the same person.

Boss said, “Mr Koh, I found one way to escape e-Invoice.”

The moment I heard this sentence, I knew today got story to listen already.

He said, “I close the Sdn Bhd, then open five sole proprietorships. Each turnover below RM1 million. Like that no need e-Invoice, right?”

I almost wanted to clap for him.
Malaysia SME taxpayers are really genius.

Haven’t even started using e-Invoice,
already started studying how to escape e-Invoice.

Haven’t even understood the 55 data fields,
already know how to split turnover.

But in LHDN’s eyes, this may be very ordinary.

Because a sole proprietor is not a separate taxpayer.

You open one enterprise, it is you.
You open five enterprises, also you.
Five enterprises do not mean five taxpayers.

One person.
One tax file.
One TIN.
One Form B.

So, if the five enterprises add up to RM3 million turnover,
you are not five small businesses of RM600,000 each.
You are one RM3 million taxpayer.

You thought you cut the cake into five slices.
LHDN may just put the five slices back onto the same plate.

And now as a sole proprietor, you carry the risk yourself.

If the real reason is different location, different partner, different business model, then still can explain.

The scary part is not restructuring.
The scary part is restructuring with no real commercial reason.

But if the real reason is only one thing.
“Because I don’t want e-Invoice.”

Then it is dangerous.
Because LHDN does not only look at form.
They will look at substance.

On paper, five enterprises.

In substance,
one boss,
one control,
one business,
one taxpayer.

So before you close your Sdn Bhd and open five sole proprietorships, ask yourself one honest question.

If e-Invoice does not exist,
would I still do this?

If the answer is no,
then this may not be tax planning.

This is called future tax audit explanation starter pack.

Boss, e-Invoice can slowly learn.

But don’t run away from one system,
until you turn your whole business structure into a five-headed snake.

Because in the end, LHDN will not ask how many heads the snake has.

LHDN will only ask one question.

This taxpayer, what is the total turnover your enterprises?