A deposit is not always a deposit under e-Invoice rules
If your business takes deposits, read this rule carefully. Event venues, contractors, and businesses with custom orders all take deposits. The rule is more specific than it sounds.
Two kinds of deposit
A refundable deposit does not need an e-Invoice at the time you receive it. The customer can still get the money back. LHDN does not treat it as income yet.
A non-refundable deposit is different. At the moment the deposit becomes non-refundable, it counts as a transaction. An e-Invoice is required.
Where the confusion comes from
Many businesses record every deposit in the same way, refundable or not. That is how the books were always kept. The e-Invoice rules split deposits into two categories with two requirements. The books did not.
The same logic applies to vouchers. A free voucher or a refundable voucher does not need an e-Invoice. A non-refundable voucher that you sell does.
What to check
Look at each kind of upfront payment that your business takes. Ask two questions for each one:
- Can the customer get this money back?
- If not, at which moment does it stop being refundable?
The second answer is the moment the e-Invoice is due. A correct setup issues the document at that moment. It does not wait for the final invoice.
Are you not sure which of your deposits need an e-Invoice? Talk to us. The Finance & Compliance Starter Kit maps each payment type to its e-Invoice treatment before the plugin goes live.
Sources: LHDN e-Invoice FAQ (updated 4 September 2026), Questions 57 and 71 to 74.
This is Part 7 of 8 in the e-Invoice series. Start with Part 1: The e-Invoice threshold changed. Ten rules that many Malaysian businesses still miss. Previous: Part 6: Credit notes and debit notes need e-Invoices too. Next: Part 8: e-Invoice is not only a Malaysia rule. It follows you across the border.
This article is general information, not tax advice.