1.0 Introduction
E-Invoice system would be implemented in stages beginning 1.8.2024 and fully completed on 1.7.2025. The first phase of implementation begins with company with annual revenue of 12-month exceeded RM100 million, reference point to financial year ended 2022.
All businesses, in particularly the micro, small and medium enterprises (MSME) would have to implement e-Invoice system latest by 1.7.2025.
2.0 Business deduction
The acquisition of stock in trade, the payment of the services and other business expenses requires to be supported by a validated e-Invoice. Revenue recognised must be tied to the e-Invoice issued, likewise the deduction must be facilitated by payment accompanied by validated e-Invoice, with the exception of company yet in implementation.
MSME having business dealings with corporation on e-Invoice system must use this opportunity to enhance and familiar with the e-Invoice process and mechanism in particularly:
(a) validation of the e-Invoice;
(b) rejection of the e-Invoice.
3.0 Timeline
The customers receiving an e-Invoice notification must ensure the data contained in the e-Invoice is accurate and complete in particularly relating to:
(a) company name;
(b) business registration number;
(c) tax identification number (TIN);
(d) business address;
(e) the business transactions particulars as to the:
(i) nature of goods/services;
(ii) value;
(iii) terms and conditions.
Any discrepancy on the contents of e-Invoice must be acted promptly with the rejection of e-Invoice within 72-hour from the time of validation; provided with valid reasons and justification.
Upon expiration of 72-hour, the e-Invoice would be valid and binding. Any subsequent amendments will be carried out using debit/credit note at the discretion of the supplier.
4.0 Certainty in business
Once e-Invoice is accepted, the supplier and the customers are allowed to access the e-Invoice, to retrieve the e-Invoice from IRB cloud and stored in their respective IT system. This improves efficiency in business transactions, cost effectiveness in doing business, foster business relationship with better and clear on business terms leading to carrying on business in complete transparency.
5.0 Tax audit
In tax audit, IRB would enforce the business deduction of its legality and validity based on the availability of e-Invoice whenever applicable. The payment reference to e-Invoice is now essential and mandatory on business expense deduction.
6.0 IRB blue print
The implementation of e-Invoice system allows IRB to discover, identify, review any discrepancy, uncover any attempted tax evasion activity relating to:
(a) income under reported or not reported;
(b) claim of expenses by fictitious invoice.
The tax administration in the digitalisation economy would improve to a higher effective and efficient level.
7.0 Conclusion
E-Invoice in essence enhances business sustainability with business efficiency. It allows timely decision making based on informed parameter of the designated data fields of e-Invoice. The digitalisation of economic and business process flow are inevitable, to in line with global changes and development.
