1.0 Introduction
The e-Invoicing entails complete and accurate of revenue reporting within the timeline of revenue recognition principle. The provision of services by independent contractors, consultants, casual workers, gig labours require to make prompt decision whether remain the business practice as it is or proceed to register as micro business with SSM.
2.0 Income
The endemic Covid-19 has escalated the business cost, the competitiveness affecting business sustainability resulted many corporations opted to employ casual workers, independent contract workers instead of full-time employees. Many individuals joining the fast-moving e-business platform such as online sales personnel, agent, Grab deliveries, taxi drivers, etc. sectors represent a larger community involving in digitalisation economic also within these categories.
The income received from the corporation can be treated as
- other income; or
- business income,
very much depends on the size of activity, quantum of fees and the number of days involved on these works’ activities.
Currently, a statement of income would be issued annually to these independent contractors on recurring services provided to corporation in lieu of the Form EA as commonly seen in employees’ cases. Payment voucher would be used on other ad-hoc payment to casual workers or part time gig workers on services rendered from time to time.
3.0 E-Invoicing regime
Independent contractor actively providing its services are advised to register with SSM, latest by 1.7.2025. The nature of business in providing the wide range services is best to be stated as principal business activity.
In e-Invoicing era, every invoice issued needs to be validated by IRB in MyInvois system prior sending to the trade customers. In these circumstances, it remains an option for these micro business entrepreneurs to familiar with the working mechanism of MyInvois portal on issuance, validation, sending, customers’ approval on e-Invoice. This system of IRB is there to assist and support micro businesses.
The IRB has provided MyInvois portal to assist and support businesses to migrate into digitalisation economic at convenience, with ease and at no business cost. They can access the portal on e-Invoice issuance at anytime and anywhere. The advantages of MyInvois of IRB further allow both the customers and the micro business entrepreneurs to have the validated e-Invoice to be retrieved conveniently.
The corporation would no longer be required to issue annual statement of income to these service providers. The validated e-Invoice received from MyInvois system would be valid and legal for business deduction purposes.
4.0 Self-billed e-Invoice
In e-Invoicing era, corporation would not be able to claim business deduction based on payment voucher issued to casual workers. Instead, the mandatory of issuance validated self-billed e-Invoice are required on payment of ad-hoc services to casual workers.
The self-billed e-Invoice needs to be issued, validated by IRB on each occasion where payments are made to casual worker, part time workers or gig workers.
For self-billed e-Invoice, these recipients will not be notified. It is only one way approach.
5.0 Taxpayers are at risk
The IRB would be able to detect and discover these casual workers, part time gig labours with the extracted particulars as stated in the self-billed e-Invoice, comprise of the followings:
6.0 Conclusion
Generally, the micro business entrepreneurs, casual workers, gig labours would be affected by and large on after 1.7.2025, being the final Phase III of e-Invoicing implementation.
The larger work force of these categories needs to familiarise with the conceptual framework and working mechanism of e-Invoice so to be able to comply with income reporting timely, fully and correctly in their tax return, either Form B on business income or Form BE on other income.
