Understanding the e-Invoicing Obligation in Donation and Contribution Requirements in Malaysia

As Malaysia accelerates its transition toward a nationwide electronic invoicing system, organisations across sectors are reviewing how the new framework applies to their specific operations—including the handling of donations and contributions. For non-profits, religious bodies, and charitable institutions, this is particularly important to ensure compliance with the evolving regulations under the Income Tax Act 1967 and the LHDN e-Invoice Guideline. One critical area to focus on is the e-invoicing obligation in donation scenarios.

In this article, we outline the key e-invoicing obligation in donation and contribution cases, based on the latest guidance issued by the Inland Revenue Board of Malaysia (LHDN).

1. Are e-Invoices Required for Donations or Contributions?
Yes, e-Invoices—whether individual or consolidated—must be issued for donations or contributions received, with the following exceptions:

Religious institutions or organisations established exclusively for the purpose of worship or advancing religion.
Other entities receiving non-tax-exempt donations or contributions under the Income Tax Act 1967.
However, this exemption does not apply if the religious organisation:

Is an approved institution or fund under subsections 44(6), 44(6B), 44(11B), 44(11C), or 44(11D); or
Manages a charity/community project approved under paragraph 34(6)(h).
Such organisations are still required to issue e-Invoices for the donations received, thereby falling under the e-invoicing obligation in donation rules.

2. Treatment of Monetary Donations
Monetary contributions—regardless of the payment method (cash, cheque, bank transfer, etc.)—require e-Invoice issuance:

If a donor requests an e-Invoice: an individual e-Invoice must be issued.
If no request is made: a consolidated e-Invoice must be issued within 7 calendar days after month-end, covering all relevant transactions.
This reinforces the e-invoicing obligation in donation transactions, even when donors do not explicitly