1.0 Introduction
E-Invoice mechanism strives to ensure revenue recognition is timely, accurately and completely being accounted by the supplier, trader of goods and services providers. The issuance of e-Invoice equally allows business expense to be validly deducted on its authenticity.
2.0 Business expense incurred by employee
Employee in discharging the employee’s duties may incur travelling, accommodation, entertainment, subscription to software, IT gadgets, online advertisement using their personal credit cards and subsequently be reimbursed by the employer.
In this regards, payment would be firstly made by the employees using their own personal credit card with the provision of MyKad identification number. The e-Invoice naturally would be issued in the name of the employee with their MyKad identification number, carrying on blanket e-Invoice number of EI00000000010.
3.0 Business deduction
The business deduction of these expenses incurred by the employees on behalf of the company would be eligible for tax deduction provided:
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- the employee is authorized by the company to incur such expenses on behalf of company;
- the expenses are necessary and essential in the production of company business income and closely connected with the principal activity of the company; and
- the e-Invoice paid by the employee is enclosed with the claim form from the employee as support for genuine reimbursement purposes.
4.0 Compliance procedures
The company would issue an authorisation letter to the designated employee, setting out the scope of expenses, the authority sum on the payment of designated stated expenses such as telecommunication charges, entertainment to customer, online advertisement, etc on behalf of the company.
The employee is advised to explore with the supplier in every occasion the possibility and availability of having the e-Invoice to be issued in the name of company. This is the best and preferred mode in justifying and support the legitimate business deduction of the company.
The needed details and particulars of the company to be included in the e-Invoice would be as follows:
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- Name of the company;
- TIN;
- Business registration no.;
- SST registration no.;
- Company address; and
- Contact no.
Alternatively, the company may consider issued corporate credit card to the designated employee, to have the e-Invoice be link immediately to the company TIN number.
5.0 Conclusion
E-Invoice system is coming near and approaching real beginning 1.8.2024. The understanding of the e-Invoice conceptual framework and working mechanism, a review of the existing practice and accounting process are essential to accommodate the e-Invoice elements, resolving e-Invoicing contentious issues and leading to a swift implementation with full compliance.
The success of e-Invoice system execution depending on your timely action and diligent act on it with full responsiveness.
