Introduction
Malaysia’s e-Invoicing system requires businesses to include a Classification Code that specifies the nature of goods or services in every invoice. In Xero, this step is essential for ensuring invoices comply with LHDN’s MyInvois portal requirements.
This guide explains what Classification Codes are, why they matter, and how you can set them up in Xero.
What Is a Classification Code in Malaysia E-Invoicing?
A Classification Code is a standardized code used to categorize goods and services in e-Invoices.
It ensures consistency, compliance, and proper reporting to LHDN.
Example:
An IT business billing for “003 - Computer, smartphone or tablet” may use a different classification code than a consulting firm billing for “022 - Others.”
Why Classification Codes Matter in Xero
Compliance: Required by LHDN’s e-Invoicing framework.
Automation: Setting the classification code in Xero allows the correct mapping and ensures every invoice has the correct code when pushed to MyInvois.
Audit Readiness: Proper coding provides clear transaction trails.
How to Assign Classification Codes in Xero
Step 1: Review LHDN’s Published Code List
Download the latest classification code list from LHDN or MyInvois portal.
Identify the codes that match your business products/services.
Step 2: MyInvois Classification in Tracking Category
Upon completion of the Xero <> LHDN MyInvois Portal setup, 45 MyInvois Classification Codes in the tracking category will be created automatically to differentiate types of sales or services according to LHDN's guideline.
Step 3: Map Codes to Your Customer's or Supplier's Contact in Xero
In Xero, go to Contacts and select the right contact.
Set the correct classification code in MyInvois Classification field.
Step 4: You are ready to issue an e-Invoice
Start issuing e-Invoices in Xero.
Verify the classification code appears in the XML/JSON file before submission to MyInvois.
Check out our article on How to Validate an E-Invoice in Xero Malaysia (Step-by-Step Guide)?
Common Mistakes to Avoid
❌ Leaving classification code blank → leads to validation errors in MyInvois.
❌ Using the wrong code for your industry → may trigger rejection.
❌ Not updating codes → LHDN may update code lists periodically (Xero should be updating automatically for any future changes).
Frequently Asked Questions (FAQs)
Q: Where can I find the official list of classification codes?
Q: Where can I find the official list of classification codes?
A: On the LHDN’s MyInvois portal or official guideline PDFs.
Q: Do I need different codes for different services my company offers?
Q: Do I need different codes for different services my company offers?
A: Yes. Each unique product/service should be mapped to the correct classification code.
Q: Can Xero automatically suggest the right classification code?
Q: Can Xero automatically suggest the right classification code?
A: Currently, you need to manually map codes, or use middleware that supports auto-mapping.
Conclusion
Using the correct Classification Codes in Xero is key to ensuring smooth Malaysia e-Invoicing compliance. By mapping codes correctly to your products, services, and accounts, you’ll avoid validation errors, ensure compliance, and streamline submission to MyInvois.