21st August 2025 - 2 min read
The Inland Revenue Board of Malaysia, also known as LHDN, has introduced a new online service called e-Derma. This new system is designed for institutions and organisations that wish to apply for tax exemption on donations they receive.
The e-Derma service is now accessible through the official MyTax portal. It marks a significant step in the LHDN’s efforts to digitise its services and improve the overall efficiency of the national tax system for both organisations and individuals.
The e-Derma system is an online platform that allows organisations to apply for approval from the Director General of Inland Revenue under Subsection 44(6) of the Income Tax Act 1967. Gaining this approval means that donations made to the organisation will be tax-exempt for the donor. The system officially went live on 20 August 2025.
The new digital service replaces the previous manual process. Before e-Derma, institutions had to submit written applications by post or over the counter. Now, the entire application can be completed and submitted online, making the process more convenient and streamlined.
By moving the application process online, the LHDN aims to enhance efficiency, transparency, and the competitiveness of Malaysia’s tax system. A key benefit of the e-Derma system is that applicants can now track the status of their submissions directly through the MyTax portal. This provides greater clarity and removes the uncertainty of the manual submission process.
The move is part of the LHDN’s wider strategy to modernise its services. For individuals, understanding how donations affect your personal finances is also important, as you can claim tax deductions for contributions to approved institutions when you file your income tax returns each year.
The LHDN has stated that the current launch is the first phase of the e-Derma initiative. The system will be expanded in a future phase to also include applications for the ‘Tabung’ or Fund category.
Until the next phase is announced, all applications for the establishment of a ‘Tabung’ must continue to follow the existing manual procedures. Organisations seeking this specific approval will still need to submit their applications in writing to the LHDN.
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