Implementing LHDN e-Invoicing for Sole Proprietorships

Starting 2024-08-01, the Malaysia Inland Revenue Board (LHDN) rolled out its e-Invoice system for taxpayers with annual turnover exceeding 100 million ringgit. LHDN estimates that by 2025, all taxpayers, regardless of size or income, MUST implement e-Invoice. Although sole proprietorships are not required to participate before 2025-07-01, some of us, especially independent content artists and social media influencers registered as sole proprietors, still need e-Invoicing to gain validation, recognition, and claimability through LHDN tax filings due to a pull-in effect. Without it, a small business risks exclusion from corporate deals across both supply chain and customer ends.

Unfortunately, for sole proprietorships, specific guidance on how to perform e-Invoicing remains scarce beyond general instructions aimed at public and private corporations. As a sole proprietor who personally explored and successfully completed e-Invoicing as a seller, we can now safely share this knowledge with others facing the same situation.

This paper shares our hands-on experience using LHDN e-Invoice as a sole proprietor, focusing on enabling and validating counterpart invoices from suppliers and customers. We wrote this paper in 2024-08 while LHDN continues beta-testing the system with private and public corporations. Therefore, some content may become outdated as LHDN pursues continuous improvements. To avoid conflict of interest and misinformation, readers MUST always refer to LHDN's official guidelines for performing e-Invoicing. The author accepts no liability for any consequences arising from the use of this paper.