What tax relief can you claim for e-invoicing costs?

If you spent money getting your business ready for e-invoicing, some of it can reduce your tax. There are two separate reliefs, each with its own conditions. This is general information, not tax advice. The rules have changed several times since 2024, so check your position with your tax agent before you file. Relief 1: faster capital allowances on equipment and software Two sets of rules gazetted on 7 April 2026 give an accelerated capital allowance (ACA) on capital spending used to implement e-invoicing: - P.U.(A) 162/2026 covers buying and installing ICT equipment for e-invoicing, such as computers and components, storage, screens, printers, scanners, barcode equipment, network equipment, and software systems or packages. - P.U.(A) 163/2026 covers the cost of developing customised software for e-invoicing, including consultation fees, payments for ownership rights to the software and related incidental fees. The rate is a 20% initial allowance plus a 40% annual allowance: 60% of the cost in the first year and 40% in the second, instead of the usual three years for ICT spending. The rules apply from year of assessment (YA) 2024 to YA 2027. The measure was proposed with Budget 2025 in October 2024 and made law in 2026, which is why it reaches back to earlier years. For customised software, the cost counts in the year the software is first ready to use, not the year you paid. The conditions that matter To qualify, you must: - be resident in Malaysia and have spent the money for your business - be registered with SSM, a local authority or another registration body - have followed your e-invoicing start date under the Income Tax (Issuance of Electronic Invoice) Rules 2024 and LHDN's guidelines - not have been given any flexibility on issuing e-invoices, including the interim relaxation period after your start date You cannot claim the ACA on a cost already claimed another way, such as an ordinary business deduction or another incentive. The one-year claim announced in July 2026 On 7 July 2026 the Prime Minister announced that businesses that fully comply with e-invoicing could claim the full capital allowance on eligible costs within one year. As at 20 October 2026 we have not been able to confirm that the rules have been amended to say this. Until they are, the gazetted two-year schedule is the formal position. The same announcement opened a voluntary disclosure programme, running until 31 December 2027, under which LHDN will not penalise businesses that correct missing or wrong e-invoices. Tax advisers note that businesses using this programme may not meet the ACA's full compliance condition. Relief 2: a deduction for consultant fees (MSMEs only) Separately, micro, small and medium enterprises can claim a tax deduction for: - consultation fees for developing customised e-invoicing software - fees paid to outside service providers to implement e-invoicing This sits in the environmental, social and governance (ESG) deduction rules, P.U.(A) 193/2025, which cover YA 2024 to YA 2027. The total deduction under these rules is capped at RM50,000 per year of assessment. Costs at the planning or preliminary stage, and fees for issuing e-invoices through the MyInvois Portal, do not qualify. One cost cannot be claimed under both reliefs. If a consultant's fee is part of developing customised software, ask your tax agent which treatment suits you. What is not covered Neither set of rules mentions monthly software subscriptions, staff salaries or IT upgrades unrelated to e-invoicing. A subscription is a running cost, not a capital purchase, so it falls outside the ACA. An illustrative example Illustrative only: a company meeting every ACA condition buys RM20,000 of ICT equipment for e-invoicing in its basis period for YA 2025. Under the gazetted rules it claims RM12,000 for YA 2025 (20% initial plus 40% annual allowance) and RM8,000 for YA 2026. If you are under the threshold From 1 September 2026, businesses with annual turnover below RM3 million are exempt from issuing e-invoices, though LHDN encourages them to take part voluntarily. Group structures can affect the exemption. If you are exempt but adopted e-invoicing anyway, check with your tax agent whether the ACA conditions still apply to you. What to do now - List your e-invoicing spending since 2024 and keep invoices, contracts and proof of payment. - Separate equipment, customised software and consultant fees, as each is treated differently. - Check whether you used any relaxation period or flexibility. - If you have already filed for YA 2024 or YA 2025, ask your tax agent whether a correction is possible. What Synco can do Synco's chartered accountants keep your books and handle your tax filings, with accounting from RM 300 a month. We can also set up cloud accounting software, so your records are ready when it is time to claim.