Reviewed
How long must Malaysian businesses keep records?
Short answer
Seven years. Under section 82 of the Income Tax Act 1967, anyone carrying on a business in Malaysia must keep sufficient records for 7 years from the end of the year the income relates to. That covers your books, invoices, receipts, bank statements and other documents that prove each entry. Not keeping them is an offence.
What the law says
Section 82 of the Income Tax Act 1967 says every person carrying on a business must keep sufficient records to work out their income. The records have to be kept for 7 years from the end of the year to which the income relates.
In practice, the clock starts when the year closes, not when the receipt was issued. Records for sales and costs in 2025 should be kept until at least the end of 2032. Records for 2026 should be kept until at least the end of 2033.
LHDN also expects entries to be made promptly. The guidance is to record each transaction within 60 days of it happening. Leaving everything to the week before Form B is due is exactly what this rule is meant to prevent.
What counts as a record
LHDN Public Ruling 5/2000 (Revised) explains what sufficient records means for individuals and partnerships. There are two parts: the books that list your money in and money out, and the documents that prove each entry.
- Books of account that record receipts and payments, or income and expenditure.
- Invoices you issue to customers, and copies of receipts you give out.
- Invoices, bills and receipts from suppliers for what you pay.
- Bank statements, pay-in slips and cheque butts.
- Payroll records if you pay staff.
- A record of your trading stock, valued at the end of the period.
- Other vouchers and documents needed to check that an entry is correct.
Small businesses can keep it simple
The ruling allows a lighter setup for small businesses. If your gross takings are up to RM150,000 a year from selling goods, or up to RM100,000 a year from services, you may keep a cash book. The cash book records your bank entries, the cash you receive and the cash you pay out.
A simple setup still needs the supporting documents. The cash book shows the totals; the invoices, receipts and bank statements prove them. Records can be kept in Bahasa Malaysia or English.
Keep business money and personal money apart where you can. A separate business bank account is not a legal requirement for every sole proprietor, but it makes your records far easier to read and to check.
What happens if records are missing
Under section 119A of the Income Tax Act 1967, failing to keep sufficient records is an offence. The penalty on conviction is a fine of RM300 to RM10,000, imprisonment of up to one year, or both.
There is also a practical cost. Without records, it is hard to show what you really earned and spent. If LHDN reviews your return, the documents are how you support the figures you declared.
A simple monthly routine
Most owners do not fall behind because they do not care. They fall behind because receipts end up in the car, in WhatsApp chats and in a drawer. A short routine each month fixes most of it.
- Record each sale and each business expense within a few days, well inside the 60-day guidance.
- Keep original supplier receipts and bills in one folder or envelope per month.
- Download the month's bank statement and tick off each business transaction against your records.
- Count and value your stock at the end of the year, or more often if stock is a big part of your business.
- Give your accountant one tidy monthly pack instead of a bag of paper in June.
- Keep a backup of digital records somewhere other than your phone.
Paper, digital or both
The ruling asks you to keep original invoices and receipts. A digital record makes everything easier to find and total, but do not throw away originals unless your accountant or LHDN has confirmed that your format is acceptable.
Whatever app you use, make sure you can export your data. Seven years is longer than many people keep the same phone, the same staff or the same software. Your records need to outlast all three.
What NiagaX does and does not do
NiagaX does
- Keeps your sales, expenses and invoices in one place, on phone or computer.
- Numbers each invoice and lists it by customer, so you can find it years later.
- Lets you download a monthly CSV pack of invoices and transactions to hand to your accountant.
- Gives you 60 days to export everything if you ever leave, so you keep your own copy.
NiagaX does not
- It does not file Form B or any tax return for you.
- It does not submit e-Invoices to LHDN MyInvois.
- It does not replace the original paper receipts the ruling asks you to keep.
- Expense tracking is not on the Free plan; it starts on paid plans.
Questions owners ask
Does the 7-year rule apply to small sole proprietors?
Yes. Section 82 applies to every person carrying on a business, whatever the size. Smaller businesses may keep a simpler cash book under Public Ruling 5/2000, but the 7-year period is the same.
When does the 7 years start?
From the end of the year to which the income relates. Records for the 2025 year should be kept until at least the end of 2032.
If I am exempt from e-Invoice, do I still need to keep records?
Yes. The e-Invoice exemption for businesses under RM3 million in annual turnover is about issuing e-Invoices. It does not remove the duty to keep records under the Income Tax Act.
Can I keep only photos of my receipts?
Public Ruling 5/2000 asks you to keep original invoices and receipts. Photos help you find and total them, but check with your accountant or LHDN before relying on copies alone.
What is the penalty for not keeping records?
Under section 119A of the Income Tax Act 1967, a fine of RM300 to RM10,000, imprisonment of up to one year, or both.
en
Official sources
Keep these records in one place
No card needed. After 30 days, Solo is RM79/month, or switch to Free.
Keep going
- For your type of business
- POS, stock and invoice app for small shops
- The NiagaX module for this
- Finance module
This guide is general information, not tax or legal advice. Rules change, so check the official LHDN source or ask your accountant before you act on it.