How long to keep receipts in Malaysia: the 7-year rule

Ask any accountant in Malaysia how long a client must keep receipts and the answer comes back straight away: 7 years. Section 82 of the Income Tax Act 1967 requires a business to keep sufficient records for 7 years from the end of the year the income relates to. SST records follow the same 7-year rule. If LHDN or the auditor asks for a supporting document inside that window, you need to produce it. LHDN sets out what counts as sufficient records, by type of taxpayer, in its public rulings on keeping sufficient records, such as Public Ruling 4/2000 for companies.

That part everybody knows. The part that causes the trouble is the paper itself.

Thermal receipts fade before the 7 years are up

Petrol, Mr DIY, the mamak, Grab and Shopee printouts, most POS slips. They are thermal prints, and thermal ink fades. Keep one in a hot car or a plastic bag in the storeroom and it can fade to blank long before the 7 years are up. Carbon copies fade too. So the receipt exists, it is filed, and when someone finally needs it, it is a blank strip of paper.

That is why so many firms still do the ritual every month:

• glue the small receipts onto A4 sheets, one by one
• cut the long ones down so they fit
• photostat the faded ones while they can still be read
• punch, file into lever-arch files, and find shelf space for 7 years of them

Whole afternoons of work that adds nothing to the accounts. Then a flood, termites or one lost box, and years of records are gone anyway.

Does the paper still have to be kept?

Yes. LHDN’s public ruling on keeping sufficient records for companies, Public Ruling 4/2000, says that where computers are used to record transactions, “original source documents such as invoices and receipts should be retained”. Only documents that were electronic in the first place, such as an emailed PDF invoice, can be kept in electronic form alone. For clients registered for SST, section 24(4) of the Sales Tax and Service Tax Acts says the same: a record that started on paper must be kept in its original form after it is scanned. More in SST record keeping. LHDN’s own record-keeping page for digital businesses says the same in plain terms: business documents, records and accounts are kept for 7 years, and the list of documents to keep includes the “resit asal”, the original receipt, for every relief or expense claimed. If you have a specific case in doubt, confirm with your tax agent.

So a scan does not replace the paper. But nothing in the rules asks for the glue, the A4 sheets or the photostat either. Those are habits firms built to stop small slips getting lost and faded ones becoming unreadable. The originals can sit in one envelope per client per month, in date order, and never be handled again unless someone asks.

What the paper cannot do is stay readable or be found quickly. A clear digital copy can. The catch is the word organised. A phone camera roll with 3,000 photos is not organised. Neither is a Google Drive folder called “Receipts 2024 (final) (2)”. When the auditor asks for one supplier invoice from March two years ago, you need to find it in seconds, not dig through a box.

A simpler habit

The firms that have stopped the glue-and-photostat routine all do the same thing: capture the receipt the day it comes in, once, keep the clear copy with searchable details, and put the original in the month’s envelope. Vendor, date, amount. The copy is what you read, search and send. The envelope is what you keep.

The best version of this habit is when the same photo that saves the receipt also gets it into the books. Snap it, the details are read, the entry is ready to import into your accounting software, and the clear copy sits on the cloud for the 7 years. One step instead of four. That is what AccPilot does, and the reason we built it. If your clients are the problem, here is how to get receipts from them without chasing.

A short checklist for the 7-year rule

1. Every receipt gets a digital copy within a day or two of being received, before it fades, and the original goes into that month’s envelope.
2. Each copy is searchable by vendor, date and amount, not just by folder name.
3. Copies are stored off-site on the cloud, not only on one office PC or one shelf.
4. Faded or handwritten originals get a human check while they are still legible.
5. Keep the originals and the copies for the full 7 years, even after a client leaves or you switch software.

Do that, and the next LHDN query becomes a two-minute search instead of a week of digging. To see it on your own receipts, book a free demo.