e-Invoicing for Employee Expense Claims: LHDN Compliance Checklist
How to process staff reimbursements and claims under Malaysia's e-Invoicing requirements
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Ensure tax deductibility of employee expenses
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Employee expense claims require e-invoice documentation for tax deduction purposes (post-mandate date). Employees must obtain validated e-invoices from vendors, attach to claims, and employers verify via MyInvois. Affected expenses: travel, meals, supplies, training fees. Keep records 7 years for LHDN audit.
This guide covers how to handle employee expense claims and reimbursements under Malaysia's e-Invoicing system, ensuring your company maintains LHDN compliance.
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Frequently Asked Questions
Do employee expense claims need e-invoices?
Yes, for tax deduction purposes. When employees claim business expenses, the supporting invoice must be a validated e-invoice (after your company's mandatory date). This ensures the expense is recognized for tax purposes when your company files its return.
What employee expenses require e-invoice documentation?
Business expenses that require e-invoice documentation: travel costs (flights, hotels, transport), meals for business purposes, office supplies, training course fees, professional subscriptions, client entertainment, and any purchase reimbursed by the company.
How do employees obtain e-invoices for claims?
Employees should request e-invoices from vendors at point of purchase. Vendors issue e-invoices via MyInvois, and a validated copy (with LHDN QR code/unique identifier) should be attached to expense claims. For small purchases, consolidated e-invoices may apply.
What if the vendor hasn't implemented e-invoicing yet?
During transition period, if vendor's mandatory date hasn't passed, traditional invoices remain valid. However, once both parties are under e-invoicing mandate, proper e-invoices are required. Keep track of vendor implementation dates.
Can petty cash expenses be claimed without e-invoices?
Small cash purchases may fall under consolidated e-invoice provisions. For expenses under certain thresholds, simplified documentation may apply. However, for tax deduction certainty, obtain proper e-invoices whenever possible.
How should HR handle e-invoice verification for claims?
HR/Finance should: 1) Verify e-invoice unique identifier against MyInvois, 2) Check invoice details match claim amount, 3) Confirm business purpose documented, 4) Store validated e-invoice with claim record, 5) Reject claims without proper e-invoice post-mandate.
What is self-billing e-invoice for employee claims?
Self-billing allows the buyer (employer) to issue e-invoice on behalf of supplier. For employee claims: the company may issue self-billed e-invoice for certain reimbursements. This requires prior arrangement and LHDN approval. Consult tax advisor for applicability.
How to handle overseas expenses for employee claims?
Foreign invoices from overseas transactions are not subject to Malaysian e-invoicing. Employees can submit foreign receipts with proper documentation. However, for local vendors used during overseas trips (Malaysian airlines, hotels), e-invoices apply.
What records should employers keep for e-invoice claims?
Maintain: validated e-invoice copy (PDF with LHDN identifier), expense claim form signed by employee, approval documentation, business purpose justification, and payment proof. Keep records for 7 years as per Income Tax Act requirements.
How does HavaHR help with e-invoice expense claims?
HavaHR expense management allows employees to attach e-invoice documents to claims. The system tracks claim status, maintains audit trail, and stores validated invoices for compliance. Managers can verify e-invoice presence before approval.