5 Scenario Where the Lender Must Issue E-INVOICE for Interest Payment

𝐖𝐡𝐨 𝐒𝐡𝐨𝐮𝐥𝐝 𝐈𝐬𝐬𝐮𝐞 𝐚𝐧 𝐄-𝐈𝐧𝐯𝐨𝐢𝐜𝐞 𝐟𝐨𝐫 𝐈𝐧𝐭𝐞𝐫𝐞𝐬𝐭 𝐈𝐧𝐜𝐨𝐦𝐞? 𝟓 𝐂𝐨𝐦𝐦𝐨𝐧 𝐒𝐜𝐞𝐧𝐚𝐫𝐢𝐨𝐬 𝐘𝐨𝐮 𝐌𝐮𝐬𝐭 𝐊𝐧𝐨𝐰!
According to LHDN’s latest e-Invoicing guidelines, interest income must be invoiced by the lender in certain situations.

Here are 5 scenarios where the lender is required to issue an e-invoice for interest:

1. A business charges interest to the public (e.g., licensed money lenders)
2. An employee pays interest to the employer (e.g., staff loans)
3. A foreign individual or foreign company pays interest to a Malaysian taxpayer
4. Interest charged between related companies involving treasury services (e.g., intra-group financing)
5. Late payment interest charged by a Malaysian taxpayer to external parties

If your case does not fall into any of the above, the responsibility to issue the e-invoice shifts to the borrower, who must issue a self-billed e-invoice instead.

Don’t get confused! Not all interest income requires the lender to issue the invoice. Whether you need to issue one — and who should issue it — depends on who’s involved and the nature of the relationship.