LHDN Audit Preparation 2026: Equipment Documentation Guide

Why LHDN Audit Preparation Matters

LHDN may audit your tax returns. Good documentation protects you. Poor documentation leads to problems. Be prepared. Stay safe.

Equipment Purchase Documents to Keep

Essential Documents

• Purchase invoice: Shows equipment cost and date
• Delivery note: Proves when equipment received
• Loan agreement: Shows financing terms
• Payment receipts: Proof of payments made
• Asset register: Lists all equipment owned

Supporting Documents

• Quotation: Original price quote
• Purchase order: Your order to supplier
• Insurance documents: Equipment coverage
• Registration documents: JPJ, APAD, etc.
• Maintenance records: Ongoing upkeep

Capital Allowance Documentation

Depreciation Schedule

• Equipment description: Type, model, serial number
• Purchase date: When acquired
• Purchase cost: Total amount paid
• Initial allowance: Year 1 deduction
• Annual allowance: Year 2+ deductions
• Remaining value: Undeducted amount

Asset Register

Keep a register of all equipment:

• Asset ID: Unique identifier
• Description: Equipment details
• Location: Where used
• Purchase date: When acquired
• Cost: Purchase price
• Accumulated depreciation: Total deductions
• Current value: Book value

Financing Documents for Audit

Document	Purpose
Loan Agreement	Proves equipment financed
Payment Schedule	Shows installment breakdown
Interest Statements	Proof of interest paid
Receipts	Payment confirmations

0% Down Payment Documentation

With 0% down payment financing:

• Loan agreement shows: 0% down payment
• Full amount financed: 100% of equipment cost
• No upfront payment: Clear documentation
• Same capital allowance: As cash purchase

Bank financing shows:
• 10-20% down payment
• 90% maximum financing
• Restrictive terms

Interest Deduction Records

Track interest for tax deduction:

• Annual interest statement: From financier
• Breakdown by year: Interest vs. principal
• Total interest paid: Cumulative amount
• Tax deduction claimed: Amount deducted

Used Equipment Documentation

Used equipment requires extra proof:

• Valuation report: Equipment value assessment
• Condition report: State of equipment
• Age verification: Manufacturing year
• Previous ownership: History of use

Banks reject used equipment: Older than 5 years

Ing Heng accepts: Any age with proper documentation

Business Use Documentation

Prove equipment is for business:

• Usage logs: When and how used
• Project records: Jobs worked on
• Income generated: Revenue from equipment use
• Operating costs: Fuel, maintenance, insurance

How Long to Keep Records

• 7 years: Standard retention period
• From audit date: If audited, keep longer
• Permanent records: Asset register always

2026 Audit Preparation Checklist

1. Create asset register: List all equipment
2. Prepare depreciation schedule: For each asset
3. Organize purchase documents: Invoices, receipts
4. File loan documents: Agreements, statements
5. Track interest payments: Annual statements
6. Document business use: Usage logs, projects
7. Keep insurance current: Coverage documents
8. Maintenance records: Ongoing upkeep proof

Real Audit Experience

"LHDN audit in 2026. Had all documents ready. Asset register organized. Depreciation schedules prepared. Loan agreements filed. Interest statements tracked. Auditor reviewed everything. No issues. All deductions allowed. Documentation saved me. Would have been in trouble without proper records. 0% down payment loan clearly documented. Full amount financed properly shown. Audit went smoothly."

— Chang Wei Meng, Business Owner

Be Audit Ready in 2026

Good documentation protects your deductions. 0% down payment with clear paperwork. 100% full loan properly documented. NO age limit clearly stated.

We provide complete documentation. Stay audit-ready with 2026 equipment purchases today.