How to Solve Common E-Invoice Rejection Errors in Malaysia

As Malaysian businesses transition to LHDN's MyInvois system, many are facing a frustrating hurdle: e-Invoice rejections. A rejected invoice means payment delays, administrative headaches, and potential compliance penalties.

This guide breaks down the most common reasons for e-Invoice rejection by LHDN and provides practical solutions to fix them.

Top 5 Common E-Invoice Rejection Reasons

1. Invalid Tax Identification Number (TIN)

Error Code: BR-01 or similar validation errors. The Problem: The Buyer's TIN provided does not match LHDN's database. This is the #1 cause of rejection. The Fix:

• Always verify your customer's TIN before issuing the invoice.
• Use the "TIN Checker" tool on the MyInvois portal.
• Pro Tip: Modern software like QNE AI Cloud Accounting includes built-in TIN validation that checks this automatically before submission, preventing rejection entirely.

2. Incorrect MSIC Codes

The Problem: Every line item in your e-Invoice must be mapped to a valid Malaysia Standard Industrial Classification (MSIC) code. Using a general or incorrect code often triggers validation warnings or rejections. The Fix:

• Review your product/service master data.
• Assign the specific 5-digit MSIC code relevant to the nature of the business transaction, not just your company's general industry.

3. Missing Mandatory Fields

The Problem: The XML/JSON file submitted is missing required fields like "Classification Code" or "Contact Number". The Fix:

• Ensure your accounting software enforces mandatory fields.
• Common missing fields include:
  • Buyer's Contact Number
  • Buyer's SST Registration Number (or "NA" if not applicable)
  • Invoice Date and Time (must be accurate to the second)

4. Digital Signature Validation Failure

The Problem: The digital signature applied to the e-Invoice is invalid, expired, or not from a recognized Certification Authority (CA). The Fix:

• This is usually a software provider issue. Ensure your vendor is using a valid digital certificate.
• QNE AI Cloud Accounting handles digital signing automatically in the background, ensuring every submission is cryptographically valid without user intervention.

5. Duplicate Invoice Numbers

The Problem: Submitting an e-Invoice with a reference number that has already been used and validated. The Fix:

• Ensure your internal numbering sequence is strictly sequential.
• If an invoice is rejected, do not reuse the same number for the corrected version if your software doesn't support versioning. It's often safer to void and issue a new number.

How to Prevent Rejections Before They Happen

The most effective way to deal with rejections is to stop them from occurring in the first place.

1. Data Cleansing

Before you even start e-Invoicing, audit your customer database. Ensure every active customer has a valid:

• TIN
• BRN (Business Registration Number)
• SST Number
• Address and Contact Info

2. Use "Pre-Validation" Features

Don't rely on LHDN to tell you what's wrong. Choose accounting software that performs pre-validation.

For example, QNE AI Cloud Accounting runs a "health check" on your invoice data against LHDN's ruleset before it attempts transmission. If a TIN is missing or a format is wrong, it alerts you immediately inside the software, saving you from the hassle of a formal rejection.

3. Automate MSIC Coding

Manually selecting MSIC codes for every invoice line is prone to human error. Configure your software to default MSIC codes at the product/service level so they populate automatically.

What to Do If Your Invoice is Rejected

1. Don't Panic: A rejection is not a penalty. It's a validation status.
2. Read the Error Message: LHDN returns specific error codes.
3. Correct the Data: Update the customer record or invoice details.
4. Resubmit: Most cloud software allows you to "Resubmit" the same invoice after correction.

Conclusion

E-Invoice compliance is a data quality game. The stricter your data management, the smoother your billing process. Leveraging intelligent software like QNE AI Cloud Accounting that automates validation and compliance checks is the smartest investment you can make to ensure your business gets paid on time, every time.

Last Updated: December 2025