Part 9: Profit distribution

  • Self-billed e-Invoice 

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 business proprietor are required to supplement the profit distribution by self-billed e-Invoice as evidential receipt.


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 on non listed companies are provided special concession to be excluded from issuing self-billed e-Invoice on dividend distribution to the shareholders. These dividends represent exempt dividend under the single tier dividend system.

 

These companies remain require to provide dividend warrant or vouchers to the shareholders as proof of income receipts. These income remains exempt income [Para 12B, Sch 6]. 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.

4.0 Conclusion

The self-billed e-Invoice mechanism would facilitate the business proprietor to able to substantiate its receipt and the original cause of income to meet IRB queries during tax audit.

 

The shareholders of company would continue rely on the dividend voucher or warrant to meet the same objective.

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