1.0 Introduction
The source of income or capital receipts in the nationwide e-Invoicing system requires the e-Invoice or self-billed e-Invoice as the primary documentation to substantiate the original cause or source of receipts.
2.0 Accountability source of receipts
Partnership, sole proprietor, LLP making its business profit and distribute the profit after tax to its partners in the partnership, LLP partners or business proprietor are required to supplement the profit distribution by self-billed e-Invoice as evidential payment to the respective recipient.
The e-Invoice would contain a 3 digit integer (xxx) to codify the payment being distribution or profit from business.
3.0 Single tier dividend
Companies pay its dividend to its shareholders be it listed or non-listed companies are provided special concession to be excluded from issuing self-billed e-Invoice on dividend distribution to the shareholders. The exclusion of self-billed e-Invoice would equally apply to trust, unit trust, real estate investment trust on distribution of profits to its unit holders.
These dividends represent exempt dividend under the single tier dividend system. However, the company, the unit trust or the REIT remain required to provide dividend warrant or vouchers to the shareholders or unitholders as proof of profit distribution to them. These income are exempt income to the recipient.
4.0 Conclusion
The self-billed e-Invoice mechanism would facilitate the business proprietor, partners in the partnership or LLP partners to able to substantiate its receipt and the original cause of income to meet IRB queries during tax audit.
The shareholders of company, unit trust holder however would continue rely on the dividend voucher or warrant to meet the same objective.
