Credit Notes and Debit Notes in MyInvois — When and How to Issue Them

Why adjustment documents exist

Once an e-invoice passes the 72-hour cancellation window and becomes final in LHDN's system, it cannot be modified or deleted. But business does not stop being messy after 72 hours. Customers return products, prices get renegotiated, quantities change, and mistakes surface late.

That is where credit notes, debit notes and refund notes come in. They are the official mechanism for adjusting finalised e-invoices without altering the original document.

Worth stating up front: LHDN is explicit that the 72-hour cancellation function exists for the convenience of supplier and buyer, and that any adjustment can still be made by issuing a note instead. Adjustment documents are not a fallback for people who were too slow — they are a first-class route, always available.

Credit notes vs debit notes vs cancellation

Before diving into details, here is how the three correction mechanisms compare:

The key distinction: cancellation changes the original document's status to Cancelled — the SDK describes a status change, not deletion. Credit and debit notes create new documents that adjust the original. Both approaches require LHDN validation.

When to issue a credit note

A credit note (document type code 02) reduces the original invoice without returning money to the buyer. Examples include:

1. Goods returned

A customer purchased 100 units but returned 20. The invoice is unpaid, and you reduce the balance without returning money. You issue a credit note for the value of the 20 returned units.

Example:

• Original invoice: 100 units x RM 50 = RM 5,000 + RM 500 sales tax (10%) = RM 5,500
• Credit note: 20 units x RM 50 = RM 1,000 + RM 100 sales tax = RM 1,100
• Net amount owed: RM 4,400

2. Price reduction after invoicing

You agreed to a discount after the original invoice was finalized. Perhaps a bulk discount kicked in retroactively, or a pricing error was discovered late.

Example:

• Original invoice: RM 10,000 for consulting services
• Agreed post-invoice discount: 10%
• Credit note: RM 1,000 + applicable tax adjustment

3. Overcharge correction

You invoiced RM 8,500 but the correct amount was RM 7,800. The 72-hour window has passed.

Example:

• Credit note: RM 700 + tax difference, referencing the original invoice

4. Reversing an invoice in full

The customer's obligation needs to be removed entirely — the sale was reversed after the cancellation window closed (or, see mistake 4 below, the wrong buyer was invoiced). Issue a credit note for the full invoice amount. The original remains in the system, and the credit note offsets it.

Refund notes: the third document

Alongside credit and debit notes, LHDN defines a refund note (document type code 04). A refund note is issued by a supplier to document a refunded amount — money actually returned to the buyer.

The distinction from a credit note is worth holding onto:

• A credit note reduces the original invoice without returning money to the buyer.
• A refund note documents money going back to the buyer.

LHDN's own illustration is a supplier refunding RM 80 for eight faulty chairs at RM 10 each and issuing a refund note for it.

In practice many businesses reach for a credit note out of habit. Where the customer has already paid and you are returning cash, the refund note is the document that describes what happened.

When to issue a debit note

A debit note (document type code 03) increases the amount the buyer owes. This is less common but necessary when:

1. Undercharge correction

You invoiced RM 3,000 but the correct amount was RM 3,500. The 72-hour window has passed.

Example:

• Debit note: RM 500 + applicable tax, referencing the original invoice

2. Additional charges discovered after invoicing

You completed a project and invoiced for it, but later discovered additional billable work (overtime hours, additional materials used, etc.).

Example:

• Original invoice: RM 15,000 for renovation work
• Debit note: RM 2,000 for additional materials + applicable tax

3. Price increase applied retroactively

A contract allows for price adjustments based on material costs, and the adjustment is calculated after the original invoice was finalized.

How to structure a credit or debit note

Adjustment documents go through MyInvois exactly like ordinary e-invoices, drawing on the same list of 55 data fields — of which, as on any e-invoice, some are optional and some conditional. Two of the conditional fields become mandatory here.

The reference to the original

Field 21 in LHDN's list is Original e-Invoice Reference Number, marked mandatory where applicable, and it becomes applicable precisely when a credit, debit or refund note is issued.

The value it takes is the IRBM Unique Identifier Number (UUID) of the original document. For API submissions, a UUID can be assigned before validation is complete, so check the document’s status rather than treating the UUID as proof of validation. It is not your own invoice number. In the UBL structure the SDK maps this to cac:BillingReference/cac:InvoiceDocumentReference, with the unique identifier in cbc:UUID and the original's own e-invoice code/number in cbc:ID. Your own reference belongs in field 20, the e-Invoice Code / Number, exactly as on any other document.

Getting these two the wrong way round is one of the more common reasons an adjustment document fails validation.

Document type code

If the document being adjusted was a self-billed e-invoice — a purchase from a foreign supplier, a payment to an agent, a platform's self-billed document — the adjustment uses the right-hand column. A code 02 credit note against a code 11 self-billed invoice is the wrong document. See self-billed e-invoices in Malaysia.

Line items

The line items on a credit or debit note reflect the adjustment, not the original transaction:

• For a credit note: Line items show the amounts being reduced (returned goods, discount applied, overcharge corrected)
• For a debit note: Line items show the amounts being added (undercharge corrected, additional charges)

Tax recalculation

The tax amounts on the adjustment document must be recalculated based on the adjusted amounts. If you are crediting RM 1,000 on goods taxed at 10% sales tax, the credit note must show RM 100 in tax — not the tax from the original invoice.

The examples on this page use a 10% sales tax rate. Under the Royal Malaysian Customs Department's current rules, sales tax on goods is charged at 5%, 10% or a specific rate, and service tax at 8% for most taxable services, with 6% for some — confirm the rate for your own items in the MySST FAQs.

Practical example: full workflow

Let us walk through a complete scenario.

Situation: You invoiced a customer RM 12,000 for 120 units of Product A at RM 100/unit. Assume sales tax of 10% applies, bringing the total to RM 13,200, and the invoice remains unpaid. More than 72 hours after validation, the customer reports that 15 units were defective and you agree to reduce the outstanding balance without returning money.

Step 1: Confirm the 72-hour window has passed (it has — cancellation is not an option).

Step 2: Create a credit note with:

• Document type: 02 (Credit Note)
• Original e-Invoice Reference Number: the IRBM Unique Identifier Number of the original invoice
• Line item: 15 units x RM 100 = RM 1,500
• Sales tax: RM 150 (10% of RM 1,500)
• Total credit: RM 1,650

Step 3: Submit the credit note through MyInvois. It goes through the same validation process as any e-invoice.

Step 4: LHDN validates the credit note. A new 72-hour window begins for this document — the buyer can request rejection of the credit note if they disagree with the adjustment, and you would then cancel it inside that window.

Step 5: Share the validated credit note with your customer.

Net result: The customer's obligation is reduced from RM 13,200 to RM 11,550.

Common mistakes to avoid

1. Assuming cancellation is required — Within 72 hours of validation, cancellation may be an option. An appropriate credit, debit or refund note can also be used to make an adjustment.

2. Putting your own invoice number in the reference field — the Original e-Invoice Reference Number takes LHDN's IRBM Unique Identifier Number for the original, not your internal number.

3. Wrong tax recalculation — Calculate the tax on the adjusted items using their applicable tax treatment and rate. A proportional calculation can be appropriate for identical items at the same rate, but check the tax category and rounding; do not assume it works when treatments or rates differ.

4. Using a credit note to correct buyer details — Credit notes adjust amounts, not identity information. If the wrong buyer was invoiced, a full credit note against the original and a new invoice to the correct buyer is a commonly used approach; LHDN's guidance says only that amendments after the window are made by credit, debit or refund notes, so confirm the exact procedure for your case.

5. Not tracking the adjustment document's own 72-hour window — credit, debit and refund notes are e-invoices themselves. They have their own validation and their own 72-hour cancellation period.

6. Using a credit note where a refund note fits — where money is actually returned to the buyer, the refund note (04) is the document that records it.

7. Using the supplier-issued codes against a self-billed document — a self-billed invoice is adjusted with codes 12, 13 and 14.

Where this fits

• The 72-hour cancellation window — the alternative mechanism, and what happens when it closes
• Self-billed e-invoices in Malaysia — when the buyer issues the document, and the 11–14 code family
• The 55 MyInvois fields — including field 21, the original-document reference
• Common MyInvois rejection errors — including document type code errors
• What MyInvois is and how it works — the wider framework

Industry-specific adjustment scenarios are covered in the guides for e-commerce (returns against consolidated documents), restaurants (voided orders and refunds) and construction (revised certificates and back charges).