Credit Note (Malaysia)
CREDIT NOTE
CREDIT NOTE
Issued by: [Seller Name] | SSM No.: [Seller S S M]
[Seller Address]
SST Reg. No.: [Seller S S T Reg]
Credit Note No.: [Credit Note Number] | Credit Note Date: [Credit Note Date]
Issued To: [Buyer Name] | SSM / NRIC No.: [Buyer S S M]
[Buyer Address]
Original Invoice Reference
This Credit Note is issued in respect of the following original invoice:
Original Invoice No.: [Original Invoice Number] | Original Invoice Date: [Original Invoice Date]
LHDN e-Invoice UIN (if applicable): [Lhdn U I N]
Reason for Credit: [Reason For Credit]
Credit Items
[Credit Description]
Credit Subtotal (excl. SST): [Credit Subtotal]
SST Adjustment: [Sst Adjustment]
TOTAL CREDIT AMOUNT: [Total Credit Amount]
Notes
This Credit Note reduces the amount payable by [Buyer Name] under Invoice No. [Original Invoice Number] by [Total Credit Amount]. Please apply this credit against your outstanding account balance.
For SST purposes: the SST adjustment of [Sst Adjustment] will be reflected in [Seller Name]'s SST return for the relevant taxable period under the Service Tax Act 2018 (Act 807) / Sales Tax Act 2018 (Act 806) as applicable.
For LHDN e-Invoice purposes: where this seller is subject to the e-Invoice mandate under the Income Tax Act 1967 (Act 53), a Credit e-Invoice referencing the original e-Invoice UIN has been or will be submitted to LHDN's MyInvois Portal for validation.
Authorised Signatory
________________
Signature
What Is a Credit Note (Malaysia)?
A Credit Note in Malaysia gives formal notice of the matter it concerns to the recipient.
The Credit Note is an essential accounting document under the Income Tax Act 1967 (Act 53) and is required under LHDN's e-Invoice framework introduced in phases from 1 August 2024. Under LHDN's e-Invoice guidelines, a Credit Note (or 'Credit e-Invoice') must be issued through LHDN's MyInvois Portal or via API to reduce or cancel a previously validated e-Invoice. The Credit Note must reference the original e-Invoice's Unique Identifier Number (UIN) assigned by LHDN and state the reason for the credit adjustment.
For businesses registered under the Sales and Service Tax (SST) framework, a Credit Note plays a critical role in adjusting previously charged SST. Under the Service Tax Act 2018 (Act 807) and the Service Tax Regulations 2018, a Credit Note issued by an SST-registered supplier must include the original Tax Invoice number, the adjusted amount, and the corresponding SST reduction. The buyer uses the Credit Note as supporting documentation to reduce previously claimed input tax credits. The Royal Malaysian Customs Department (RMCD) requires SST-registered businesses to maintain proper Credit Note records for audit purposes under Section 47 of the Service Tax Act 2018.
For international trade, a Credit Note may also be issued by a Malaysian exporter to adjust the value of exported goods — for example, if goods are found to be defective on arrival and the exporter agrees to reduce the invoice value by a credited amount, adjusting the customs value previously declared under the Customs Act 1967 (Act 235).
The legal framework governing the Credit Note (Malaysia) in Malaysia draws on several key statutes and regulatory bodies. Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Parties executing a Credit Note (Malaysia) in Malaysia should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Companies Act 2016 (Act 777) sets the foundational requirements.
When Do You Need a Credit Note (Malaysia)?
A Credit Note in Malaysia is issued in several situations where a previously issued invoice requires downward adjustment.
A Credit Note is needed when a buyer returns goods to a Malaysian supplier due to defects, damage, or wrong delivery — the supplier issues a Credit Note for the returned goods' value, reducing the outstanding invoice amount or creating a credit for future purchases.
A Credit Note is required when an SST-registered Malaysian service provider overcharges service tax on an invoice — the Credit Note corrects the error, reduces the taxable amount, and adjusts the SST previously charged, in compliance with the Service Tax Act 2018 (Act 807) and the Service Tax Regulations 2018.
A Credit Note is needed when a Malaysian seller agrees to grant a post-invoice discount or rebate — for example, a volume discount based on annual purchases that exceeds the threshold — and issues a Credit Note to reflect the agreed reduction in the amount owed.
A Credit Note is required under LHDN's e-Invoice mandate when a previously validated e-Invoice contains an error in price, quantity, or description — the Credit Note cancels or reduces the original e-Invoice and must be submitted through LHDN's MyInvois Portal with reference to the original e-Invoice's UIN.
A Credit Note is needed when a Malaysian property developer adjusts a buyer's progress payment invoice after a variation order reduces the scope of work — the Credit Note reflects the reduction in the agreed construction contract sum under the PAM Contract 2018 or Housing Development (Control and Licensing) Regulations 1989.
A Credit Note is issued when a subscription-based Malaysian SaaS company cancels a customer's subscription mid-period and credits the unused portion of the pre-paid annual fee, reflecting the credit in the company's accounts receivable records.
What to Include in Your Credit Note (Malaysia)
A Malaysia Credit Note must include the following essential fields.
Credit Note Label: Clearly label the document 'CREDIT NOTE' to distinguish it from an invoice. For e-Invoice Credit Notes, the LHDN e-Invoice type code for Credit Notes must be used in the MyInvois Portal submission.
Credit Note Number: Assign a unique sequential Credit Note number for accounting and audit trail purposes, distinct from the invoice numbering series.
Credit Note Date: State the issue date. For SST purposes under the Service Tax Act 2018 (Act 807), the date determines the accounting period in which the SST adjustment is reported.
Original Invoice Reference: Reference the original invoice number and date to which the Credit Note relates. For LHDN e-Invoice Credits, include the original e-Invoice's LHDN-assigned Unique Identifier Number (UIN).
Seller Details: Full legal name, SSM registration number, registered address. For SST-registered sellers, include the SST registration number.
Buyer Details: Full legal name, SSM registration number, address.
Reason for Credit: State the reason — goods returned, price adjustment, billing error, cancellation, or post-invoice discount. This is required for LHDN audit purposes under Section 82 of the Income Tax Act 1967 (Act 53).
Itemised Credit Amount: List each line item being credited — description, quantity, unit price, and credit amount. Show the SST reduction separately if the original invoice included SST.
Total Credit Amount: State the total amount credited in Malaysian Ringgit (RM), including the SST component if applicable.
Balance After Credit: Optionally show the revised balance due after the credit — original invoice amount minus credit note amount.
Additional compliance elements for a Credit Note (Malaysia) used in Malaysia include: Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Forms-legal.com provides this template as a starting point for Malaysia-compliant documentation.
Cite this page
Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Credit Note (Malaysia) (Malaysia) [Legal document template]. Forms Legal. https://forms-legal.com/malaysia/business/corporate/credit-note-malaysia
"Credit Note (Malaysia) (Malaysia)." Forms Legal, 2026, https://forms-legal.com/malaysia/business/corporate/credit-note-malaysia.
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title = {Credit Note (Malaysia) (Malaysia)},
year = {2026},
howpublished = {\url{https://forms-legal.com/malaysia/business/corporate/credit-note-malaysia}},
note = {Free legal document template. Based on Companies Act 2016 (Act 777)}
}Also available for these jurisdictions:
Frequently Asked Questions
A Credit Note must be issued in Malaysia whenever a previously issued invoice requires a downward adjustment — including goods returns, pricing errors, overcharged service tax, post-invoice discounts, or cancellation of services. For SST-registered businesses under the Service Tax Act 2018 (Act 807), a Credit Note must be issued promptly after the adjustment event so that both the seller and buyer can correctly report the adjusted SST in their SST returns for the relevant taxable period. Under LHDN's e-Invoice framework implemented from 1 August 2024, a Credit e-Invoice must be submitted to LHDN's MyInvois Portal to adjust or cancel a previously validated e-Invoice — the Credit Note must reference the original e-Invoice's Unique Identifier Number (UIN). Businesses are required to maintain Credit Note records for at least seven years under Section 82 of the Income Tax Act 1967 (Act 53) and Section 47 of the Service Tax Act 2018.
A Credit Note directly affects the SST calculations for both the seller and the buyer in Malaysia. When a Credit Note is issued by an SST-registered supplier under the Service Tax Act 2018 (Act 807), the supplier reduces its output service tax liability by the SST amount credited — the adjustment is reported in the supplier's bi-monthly SST return filed with the Royal Malaysian Customs Department (RMCD). The buyer, if also SST-registered, must reduce any input tax credit previously claimed for the original invoice by the SST amount shown in the Credit Note. The Credit Note must clearly state the original invoice number, the credit amount, and the SST reduction to enable both parties to make the correct adjustments in their SST returns. Failure to issue or account for Credit Notes properly may result in an overpayment of SST by the supplier or an overclaim of input tax by the buyer, both of which may be assessed as tax shortfalls by RMCD.
Yes, a Credit Note can be issued instead of a cash refund in Malaysia — the Credit Note reduces the buyer's outstanding liability to the seller or creates a credit balance that can be applied against future invoices. Whether a Credit Note satisfies a buyer's entitlement depends on the terms of the original contract. Under the Consumer Protection Act 1999 (Act 599), consumers purchasing goods from retailers have specific rights to a refund for defective goods — a seller cannot compel a consumer to accept a credit note in lieu of a cash refund where the consumer has a statutory right to a refund. For commercial B2B transactions under the Contracts Act 1950 (Act 136), the parties can agree that a credit note is the agreed mechanism for resolving invoice disputes, price adjustments, or returns, provided this is expressly or impliedly agreed in the supply terms or purchase agreement.
Yes, a Credit Note (or Credit e-Invoice) is required under LHDN's e-Invoice framework in Malaysia whenever a previously validated e-Invoice needs to be adjusted downward or cancelled. Under LHDN's e-Invoice guidelines effective from 1 August 2024 for large businesses, a Credit e-Invoice must be submitted through LHDN's MyInvois Portal (or via API) and must: (1) reference the original e-Invoice's Unique Identifier Number (UIN) assigned by LHDN; (2) state the reason for the credit adjustment; (3) show the credit amount and any SST adjustment; and (4) receive LHDN validation before it is issued to the buyer. An e-Invoice cannot be deleted or directly amended once validated by LHDN — the only way to correct a validated e-Invoice is to issue a Credit e-Invoice (to reduce or cancel) or a Debit e-Invoice (to increase) through the MyInvois Portal. This requirement applies to all businesses within the mandatory e-Invoice phases.
A Credit Note (Malaysia) does not legally require a lawyer in Malaysia, and individuals and businesses may draft and execute the document independently. The Companies Act 2016 (Act 777) does not mandate legal representation for the creation or signing of this type of document. However, seeking independent legal advice from a qualified Malaysia lawyer is recommended for transactions involving substantial financial value, complex regulatory requirements, or cross-border elements where multiple legal jurisdictions may apply. A lawyer can verify that the document complies with all applicable statutory requirements, identify potential risks specific to the transaction, and confirm that the terms adequately protect the interests of all parties involved. The Federal Court of Malaysia has jurisdiction over disputes arising from this type of document, and Companies Commission of Malaysia (SSM) may impose additional compliance obligations depending on the nature of the underlying transaction. Professional legal review is particularly advisable where the document will be submitted to government agencies or used as evidence in legal proceedings.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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