1.0 Introduction
The IRB is the designated Government agency to ensure e-Invoicing implementation by all businesses are swiftly and promptly completed and in action by 1.7.2025.
The agency had timely issued e-Invoice guideline on 21.7.2023, provide e-Invoice contents on 29.9.2023 and acted as liaison authority to address and resolving the contentious e-Invoice issues arising.
The IRB is working closely with various industries to address the contentious unique e-Invoicing issues, clarify and provide the specific treatment related to particular transactions or situations. The outcome is continuously, progressively published in FAQ. Industry specific FAQ are found in https://www.hasil.gov.my/en/e-invoice/.
The IRB has vigorously revised and published the e-Invoice Guideline version 2.3, Specific Guideline version 2.1, Software Development Kit version 1.0 on 6.4.2024 to guide the businesses progressively on e-Invoicing implementation.
2.0 Scope and coverage
E-Invoice would be issued and apply in every business transaction, divided into the following categories: –
3.0 Application
E-Invoice primarily governing on revenue transactions, income items and remain the obligation of the supplier to issue e-Invoice to its trade customers. Supplier refers to business entity carrying on the sales of goods or the provision of services in the course of business in Malaysia.
The trade customers would only eligible on business deduction based on validated e-Invoice received on business transactions.
3.1 Exception
Malaysian companies or business entities that are not yet implement the e-Invoice system allows to use the existing invoice process to recognise income and revenue. This refers to company with annual turnover of ≤ RM100 million. The trade customers on the other hand would be able to claim business deduction based on these invoices.
With effect from 1.8.2024, company > RM100 million is mandatory to issue e-Invoice to account for the revenue transactions.
3.2 Dealing with Phase I supplier
Business entities in Phase II and Phase III remain continue using the existing practice to issue invoice to Phase I suppliers on the sale of goods or provision of services. These invoices would be eligible for business deduction to Phase I suppliers.
On 1.8.2024, it is the Phase I suppliers that are mandatory to have the e-Invoice to be validated prior to sending to its trade customers. Failing which, the e-Invoice would not be able to eligible for tax deduction to the trade customers.
4.0 Compliance
The implementation of e-Invoice mean the issuance must be based on revenue recognition principles and to be submitted to IRB for validation either through:
(a) MyInvois portal
This would be hosted by IRB and available to every taxpayer that need to issue e-Invoice but no API interface.
(b) Application Programming Interface (API)
The existing ERP, SAP system or leading accounting software packages would have the API developed to connect with MyInvois Portal hosted by IRB.
The invoice issued by the business entity (supplier) would be validated on a near real time basis with the designated validation number sent to the supplier. The validated e-Invoice with the QR code would be retained by IRB, available to be accessed by both the supplier and the trade debtor.
The issuance of e-Invoice to be validated by IRB is restricted to only one option, i.e. MyInvois portal or API. The supplier is not allowed to use the mixture of both MyInvois portal and API concurrently to access the validated invoice.
5.0 Business efficiency
The digitalisation of e-Invoice allows the engagement of data analytic software embedded with AI technology into analysis of revenue and expenses of the business in real time. Statement of debtors, aging analysis of debtors/creditors, income statement, cash flow analysis can be generated at any time to aid revision of pricing, refinement and formulation of business strategy.
6.0 IRB reliance
E-Invoice mechanism eventually lead to accurate and full and timely of revenue recognition, complete transparent of business transactions, uncover black economy, discoveries and deterrence of tax evasion. It provides a platform to IRB to consolidate data accurately; timely evaluate and assess the taxpayer business progress and setback.
The business and economic development of industry is at a glance in current time.
7.0 Conclusion
The e-Invoice system has been successfully implemented in Indonesia (2015), Thailand (2017), India (2020), Australia (2022), New Zealand (2022), Philippines (2022), and Vietnam (2022).
It is a proven system that allows the growth of business effectively and efficiency, indirectly promote an equitable tax collection mechanism and effective tax system to stay.
