5 Ways Shopee & Lazada Sellers Lose Money on Taxes

Shopee and Lazada sellers can lose money on taxes when they report the wrong sales amount, miss legitimate expenses, miscalculate inventory, mix personal spending with business costs or leave compliance until the last minute.

Marketplace selling may appear simple because the platform processes orders and transfers money to the seller. However, the amount received is rarely the same as total sales.

Commissions, advertising fees, refunds, vouchers and shipping adjustments may already have been deducted. Expenses paid outside the platform may not appear in the seller dashboard at all.

Without proper reconciliation, sellers may pay tax on more profit than they earned or create inaccurate records that require corrections later.

Why Are These Mistakes So Common?

Most marketplace sellers focus first on products, reviews and order volume. Accounting services and systems are often introduced only after the business becomes difficult to track manually.

A single order may involve:

• The amount paid by the customer.
• The amount recognised as a completed sale.
• Refunds and discounts.
• Platform fees.
• The final payout.

Problems arise when sellers record one figure without checking the transactions behind it.

Online business income may also be taxable even when the seller operates from home or entirely through Shopee or Lazada. The final tax amount depends on taxable business income, allowable expenses, capital allowances and other relevant adjustments.

1. Reporting the Wrong Sales Amount

The first mistake is using the wrong figure as revenue.

Mistaking payouts for total sales

A marketplace payout is usually a net amount. Fees, refunds and other charges may already have been deducted.

For example, a seller may complete RM50,000 in sales but receive RM43,500 in the bank. Recording only RM43,500 as sales may understate revenue while hiding RM6,500 in fees, refunds and adjustments.

A clearer approach is to record separately:

• Completed sales.
• Cancelled orders.
• Refunds.
• Platform commissions.
• Transaction and advertising fees.
• Shipping adjustments.
• Seller-funded discounts.

The final net amount should then reconcile with the bank payout.

Recording cancelled or refunded orders as sales

The opposite problem occurs when sellers record every order placed as final revenue, even when some orders are later cancelled or refunded.

This makes sales appear too high. Refunds may also occur in a later month, so sellers need records linking each adjustment to the original order.

How to avoid the mistake

Download marketplace reports monthly and compare completed orders, cancellations, refunds, fees and bank payouts.

Every difference should have a clear explanation.

2. Missing Legitimate Business Deductions

Sellers may pay more tax than necessary when genuine business expenses are not recorded.

Overlooking marketplace charges

Marketplace fees are often deducted automatically, making them easy to miss.

Potentially deductible expenses may include:

• Platform commissions.
• Transaction fees.
• Advertising and affiliate charges.
• Shipping and packaging costs.
• Product photography.
• Software subscriptions.
• Staff wages.
• Business internet and telephone costs.

These costs are not automatically deductible. They should generally be incurred in producing business income, properly supported and separated from private, capital or specifically disallowed expenditure.

Losing invoices and receipts

Expenses paid outside the marketplace are also commonly missed.

A bank statement proves that money was paid, but it may not show what was purchased or whether it was for business use.

Receipts, invoices and payment records should therefore be stored consistently and matched to the relevant business purpose.

Claiming mixed-use costs in full

Internet, telephone, electricity and vehicle costs may be partly personal and partly business-related.

Only a reasonable and supportable business portion should generally be claimed. Sellers should keep the bills and use a consistent allocation method.

Treating capital purchases as expenses

Computers, printers, shelving and equipment may be capital assets rather than immediately deductible operating expenses.

The business may instead need to claim capital allowances where the expenditure qualifies.

Read More: How to Price Your Products for Profit for Malaysia SMEs

3. Treating All Inventory as an Immediate Expense

Buying stock does not necessarily mean the full purchase amount can be deducted in the same year.

Some products may still be unsold at the end of the accounting period.

Ignoring closing inventory

A simplified cost-of-sales formula is:

Opening inventory + purchases − closing inventory = cost of goods sold

Suppose a seller buys RM80,000 of products but still holds RM25,000 of stock at year-end.

Treating the full RM80,000 as an expense would overstate the cost of goods sold because part of the stock remains unsold.

Closing inventory should therefore be counted and valued consistently.

Using the listing price as inventory value

Inventory should not normally be valued using its Shopee or Lazada listing price because that price may include profit margins, campaign discounts and other commercial factors.

Closing inventory should generally be valued at the lower of cost and net realisable value.

Cost normally includes relevant expenditure incurred to purchase the stock and bring it to its present location and condition.

Failing to record damaged or returned stock

Sellers should track:

• Customer returns.
• Damaged or expired goods.
• Missing parcels.
• Defective products.
• Promotional samples.
• Stock taken for personal use.

Damaged or unsaleable stock may need to be written down to a supportable net realisable value.

A write-off is not automatically deductible. Sellers should retain evidence such as photographs, inventory reports, return records, courier claims and disposal documents.

Stock taken for personal use should also be recorded separately rather than treated as damaged stock or a business expense.

4. Mixing Personal and Business Transactions

Many sellers use the same bank account, card or e-wallet for household and business spending.

This makes accounting unnecessarily difficult.

Claiming private expenses

Personal groceries, holidays and household purchases do not become deductible simply because they were paid from an account that also receives business income.

Private costs should be excluded, while mixed-use expenses should be claimed only to the extent of a supportable business portion.

Missing genuine expenses

Messy records can also hide valid costs.

Packaging, software, advertising or delivery expenses may be buried among personal transactions and forgotten.

Treating owner withdrawals as expenses

When a sole proprietor transfers money from the business to a personal account, it is usually an owner’s withdrawal rather than a deductible expense.

Money introduced by the owner is generally a capital contribution, not sales revenue.

Different rules may apply where the business operates through a company.

How to separate transactions

Use a dedicated business bank account, card or e-wallet.

Record owner contributions and withdrawals separately and review transactions each month.

This makes expenses easier to support and gives the seller a clearer view of business performance.

5. Ignoring Deadlines, Records and e-Invoice Requirements

Tax compliance should not be treated as a once-a-year task.

Waiting until the filing deadline often leads to missing documents, inaccurate figures and rushed corrections.

Leaving record-keeping until year-end

Marketplace sellers should retain:

• Sales and payout reports.
• Platform fee and supplier invoices.
• Bank statements.
• Advertising records.
• Inventory reports.
• Refund and courier documents.
• Payroll records.
• Tax workings.

Malaysian businesses generally need to keep relevant tax and accounting records for at least seven years.

The precise starting point may depend on the year concerned and when the return was filed. Records connected with an appeal should be kept until the matter is resolved.

Read More: 10 Ways Malaysian SMEs can Reduce Operating Expenses

Assuming the platform handles everything

Shopee and Lazada may provide reports, invoices and certain e-Invoice-related documents.

However, the seller remains responsible for:

• Maintaining sufficient records.
• Preparing reliable accounts.
• Reporting business income correctly.
• Supporting expense claims.
• Reconciling sales, fees, refunds and payouts.
• Meeting applicable e-Invoice obligations.

The platform does not automatically calculate the seller’s final taxable profit.

Ignoring e-Invoice readiness

Malaysia’s e-Invoice requirements depend on matters such as annual turnover or revenue, commencement date and exemption conditions.

Sellers should confirm:

• Whether an exemption applies.
• Which turnover figure determines implementation.
• Their mandatory implementation date.
• Which party issues each e-Invoice.
• When self-billing is permitted.
• How marketplace documents should be recorded.
• Whether sales outside the marketplace require a separate process.

A self-billed e-Invoice is allowed only in circumstances recognised by LHDN. It is not a general replacement whenever a supplier does not issue an e-Invoice.

Because thresholds and implementation rules may change, sellers should review the latest official LHDN guidance instead of relying on older dates.

How Can Sellers Reduce These Tax Losses?

A simple monthly routine can prevent many common problems:

• Download marketplace reports.
• Match payouts against bank deposits.
• Separate sales, refunds, discounts and fees.
• Save invoices and receipts.
• Update inventory quantities.
• Review damaged and returned stock.
• Investigate unexplained transactions.
• Allocate mixed-use expenses consistently.
• Record owner contributions and withdrawals separately.
• Set aside money for tax.
• Check current e-Invoice requirements.

Smaller sellers may manage this through a structured spreadsheet.

Businesses with several stores, high transaction volumes or large inventories may need accounting software and professional support.

Monthly bookkeeping is far easier than reconstructing an entire year from bank transfers, screenshots and incomplete reports.

Preventing a Loss Of Money

Shopee and Lazada sellers rarely lose money because of one dramatic tax mistake.

The damage usually comes from smaller issues such as incorrect sales figures, missed expenses, unsupported deductions, inaccurate inventory values and weak record-keeping.

A reliable accounting system helps sellers calculate tax using more accurate business figures while giving them a clearer view of margins, stock costs and overall performance.

Accounting.my can help marketplace sellers organise transaction records, reconcile platform payouts and prepare more reliable accounts. Our accounting and bookkeeping services can also reduce the burden of maintaining tax records and preparing for e-Invoice requirements as the business grows.

Disclaimer: This article provides general information only and does not constitute tax, accounting or legal advice. The correct treatment depends on the seller’s circumstances, business structure and the latest Inland Revenue Board of Malaysia guidance.

Sources

• Inland Revenue Board of Malaysia, Guidelines on Taxation of Electronic Commerce Transactions.
• Inland Revenue Board of Malaysia, Public Ruling No. 2/2020: Valuation of Stock in Trade.
• Inland Revenue Board of Malaysia, Public Ruling No. 3/2020: Withdrawal of Stock.
• Inland Revenue Board of Malaysia, guidance on keeping sufficient records.
• Inland Revenue Board of Malaysia, current e-Invoice Guideline and General Frequently Asked Questions.
• Income Tax Act 1967.
• Inland Revenue Board of Malaysia, guidance on allowable and non-allowable business expenses.