SSM Longgarkan Syarat Pembatalan Syarikat
June 12, 2025
Tax Incentives for E-Invoicing
As Malaysia embraces digital tax reform, e-Invoicing is becoming a core part of the country’s modern tax system. Led by the Inland Revenue Board (LHDN), the nationwide rollout is scheduled to begin with large taxpayers in August 2024 and will gradually expand to all businesses by 2026.
To support this transition, especially for small and medium-sized enterprises (SMEs), the government has introduced a tax incentive through Accelerated Capital Allowances (ACA) under Budget 2024, helping businesses reduce their compliance costs.
What Is the Incentive About?
Businesses investing in systems to support e-Invoicing can enjoy faster tax deductions for eligible capital expenses. Instead of spreading costs over several years, companies can now claim the full amount in just two.
Eligible Expenses – What Can You Claim?
The ACA applies to capital investments that directly support e-Invoicing:
- ICT Equipment: Computers, servers, and other hardware used for invoicing tasks
- Software: Off-the-shelf accounting or invoicing software (e.g., SQL, SAP)
- Custom System Development: Tailored software or APIs built for integration with LHDN’s platform
- Consultancy Services: Expert help for setup, compliance, or redesigning workflow
These must be one-off capital expenses, not monthly subscriptions or operational costs.
How the Tax Deduction Works
Qualifying expenses can be written off over two years:
- Year 1 (YA 2025): 60% tax deduction
- Year 2 (YA 2026): 40% tax deduction
Who Can Claim This?
To be eligible, your business must:
- Be tax-registered in Malaysia and in good standing with LHDN
- Use the expense for e-Invoicing readiness (not for general IT upgrades)
- Provide proper documentation like invoices, contracts, and proof of payment
- Ensure the cost is capital in nature, not operational (e.g., not salaries or rent)
Expenses That Don’t Qualify
You can’t claim ACA for:
- Equipment rentals
- Staff costs or overtime
- Internet bills or SaaS subscriptions
- CRM or marketing tools unrelated to invoicing
Timing: When to Claim
This incentive is effective from Year of Assessment 2024 and continues into YA 2025. To benefit, make sure to include eligible claims in your Form C tax return for the relevant year.
Why It Matters
This incentive is more than a tax break—it’s a chance for businesses, especially SMEs, to modernize systems and get ahead of mandatory e-Invoicing deadlines. With proper planning, companies can reduce costs while improving compliance and operational efficiency.
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Shukri Yusof & Co. (Synco) is a member firm of the Malaysian Institute of Accountants, also known as the Malaysian Institute of Chartered Accountants. Our commitment is to deliver results that exceed expectations with utmost effectiveness and efficiency.
