Your e-Invoice System Costs Could Now Qualify for Faster Tax Relief

LHDN's updated e-Invoice FAQ now lists three tax incentives available to businesses implementing e-Invoice, up from the single incentive mentioned previously. Each is tied to a specific piece of legislation.

The first is a tax deduction of up to RM50,000 for each year of assessment, covering ESG-related expenditure such as consultation fees for developing customised e-Invoice software. This applies to MSMEs as defined under the Small and Medium Enterprises Corporation Malaysia Act 1995, for years of assessment 2024 to 2027, under the Income Tax (Deduction for Expenditure in relation to Environmental Preservation, Social and Governance) Rules 2025.

The second is an Accelerated Capital Allowance for ICT equipment and computer software used to implement e-Invoice. This shortens the capital allowance claim period from three years to two years, made up of an initial allowance of 20 percent and an annual allowance of 40 percent. It applies for years of assessment 2024 to 2027, under the Income Tax (Accelerated Capital Allowance) (Information and Communication Technology Equipment for the Implementation of Electronic Invoice) Rules 2026.

The third is an Accelerated Capital Allowance for the development cost of customised computer software used to implement e-Invoice. This shortens the claim period from two years to one year, for years of assessment 2026 and 2027.

If you wish to focus on running and growing your business, our CFO advisory team can take care of your accounting, payroll, tax planning, e-stamping, corporate secretarial and compliance matters for you. Feel free to WhatsApp us at 010-246 2151.