(TAX UPDATE) E-Invoice for Donations in Malaysia — What NGOs, Religious Bodies & Donors Must Know

(TAX UPDATE) E-Invoice for Donations in Malaysia — What NGOs, Religious Bodies & Donors Must Know

By: Koh Teck Peng | Licensed Tax Agent | Johor Bahru

“Donations also need e-Invoice ah?”
“My temple not selling anything … why must issue e-Invoice?”
“My NGO gives tax receipts already why still kena e-Invoice?”

These are not just random questions. They are real, urgent concerns raised by many well-meaning charities, temples, and tax-exempt organisations across Malaysia.

For months now, I’ve been reminding tax-exempt bodies :
Being tax-exempt does not mean you’re exempt from e-Invoice.

But the reality is … many NGOs and religious institutions are overwhelmed.

They’re already running on tight manpower and limited budgets.
Now, with e-Invoicing mandatory, they face extra admin work, system upgrades, and the fear of making compliance mistakes.

Finally, on 7 July 2025, LHDN issued a long-awaited FAQ on Donations and Contributions and it confirmed our concern:

Yes — e-Invoice is required for most donations.

If you run or support a charity, religious body, or community organisation . You cannot afford to ignore this.

Let me break it down in plain English, with real answers tailored for those affected before mistakes lead to enforcement action.

1. Must You Issue E-Invoice for Donations?

Yes, if:

  • You are a tax-exempt institution approved under Section 44(6), 44(6B), 44(11B), 44(11C), 44(11D) of the Income Tax Act, or

  • You manage a charity/community project approved under Section 34(6)(h).

Even if you are not selling goods or services, monetary donations received must now be recorded via e-Invoice.

2. Who Is Exempted?

There are two important exceptions:

Exempted from issuing e-Invoice:

  • Religious institutions or organisations set up exclusively for religious worship or advancement of religion, provided they are not approved under any of the Income Tax Act provisions above.

  • Any non-approved body or individual receiving donations that are not tax-exempt.

However, once a religious institution is approved as an Institution, Organisation, or Fund (IOF) or is managing a Section 34(6)(h) approved project, they lose this exemption and must comply with e-Invoice rules.

3. What Types of Donations Require E-Invoice?

Monetary Donations

E-Invoice is mandatory for all monetary donations, regardless of:

  • Payment method (cash, cheque, transfer, DuitNow, etc.)

  • Source (individuals, companies, etc.)

There are two methods to handle this:

A. Donor Requests E-Invoice

  • You must issue an individual e-Invoice to the donor.

  • If you issue this, pre-printed official receipt is not required.

B. Donor Does Not Request

  • You must issue a consolidated e-Invoice within 7 calendar days after month-end.

  • This must include receipt numbers and donation details, even though the donor’s TIN is not required.

Any donation for which an individual e-Invoice is issued must not be included in the consolidated submission.

Donations-in-Kind

No e-Invoice is required if the donation is in the form of goods or non-monetary assets.

But keep good records for audit and transparency purposes.

4. What About Official Receipts?

This applies specifically to approved IOFs:

  • If a donor requests an e-Invoice, you issue the e-Invoice only. No need for pre-printed official receipt.

  • If a donor does not request an e-Invoice, you must:

    • Issue the pre-printed official receipt, and

    • Include it in your monthly consolidated e-Invoice submission.

If your organisation is using e-Receipts or internal systems that do not follow e-Invoice format, you must get prior approval from LHDN.

5. Special Case: Religious Institutions

If you are a temple, church, mosque, or other religious body:

  • For donations tied to worship or religious advancement, you are exempted from issuing e-Invoice unless you are also tax-exempt under Section 44 or managing an approved project.

  • But if you sell goods or provide services (e.g., books, hall rental, training), you must issue e-Invoices for those commercial activities.

6. Can I Use My Existing System?

Yes. You don’t have to buy expensive software.

LHDN provides a free platform: MyInvois Portal — suitable for smaller organisations.

Alternatively, you may continue using your current accounting system if it is capable of generating e-Invoices and can comply with the requirements.

7. What is My BRN and TIN?

For tax identification and e-Invoice purposes:

  • If your organisation is registered with ROS, SSM, or BHEUU, use your existing registration number as your Business Registration Number (BRN).

  • If not registered, use the stamp certificate number from your governing documents (e.g., constitution) not the adjudication number.

Branches of religious organisations may use the head office’s TIN, or apply separately if they manage finances independently.

8. Do Donors Need to Issue E-Invoice?

No.

Donors do not need to self-bill or issue e-Invoices for donations even when donating to bodies that are not approved under the Income Tax Act.

But if donors are acquiring imported goods or services from foreign suppliers, then self-billed e-Invoice is required as outlined in Section 8.3 of the e-Invoice Guideline. This applies generally, and not specific to donations.

Final Checklist for Affected Entities

  • Check if your organisation is tax-exempt under Income Tax Act

  • Review how you receive and record donations

  • Decide between individual vs consolidated e-Invoice

  • Plan monthly submissions … consolidated e-Invoices must be submitted within 7 days from month-end

  • Choose whether to use MyInvois Portal or your own accounting system

  • Educate your team and donors on what’s changing

Final Words

Many NGOs and religious institutions are still unsure about the practical side of this new requirement.

The rules are now clear. What’s needed is planning, internal coordination, and consistent month-end tracking.

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