E-Invoicing Malaysia - Coverage

Introduction

An e-Invoice is a digital representation of a transaction between a supplier and a buyer. e-Invoice replaces paper or electronic documents such as invoices, credit notes, and debit notes.

An e-Invoice contains the same essential information as a traditional document, for example, supplier’s and buyer’s details, item description, quantity, price excluding tax, tax, and total amount, which records transaction data for daily business operations.

Is e-invoicing mandatory in Malaysia?

Malaysia will introduce a countrywide e-invoicing mandate in June 2024.

The Malaysian government plans to introduce a Centralized Pre-Clearance CTC model on all transactions to increase efficiency and strengthen the tax administration. A gradual introduction of the obligation will commence in June 2024 and end in 2027.

Transaction Types Subject to E-Invoicing

e-Invoice covers typical transaction types such as

• Business to Business (B2B),

• Business to Consumer (B2C), and

• Business to Government (B2G).

In relation to certain B2C transactions where e-Invoices are not required by the end consumers to support the said transactions for tax purposes, suppliers will be allowed to issue a normal receipt or invoice in accordance with the current practices adopted by suppliers. After a certain period or timeframe, suppliers would be required to aggregate the normal receipts or invoices issued to end

For B2G transactions, the e-Invoice flow will be similar to B2B.

What is the applicability of e-invoicing?

e-Invoice applies to all taxpayers undertaking commercial activities in Malaysia.

This includes businesses engaged in the provision of goods and services and certain non-business transactions between individuals.

Guidance on e-Invoice requirements for certain non-business transactions between individual

taxpayers will be provided in due course.

Who Is Subject to E-Invoicing?

All individuals and legal entities are required to comply with e-Invoice requirement, including:

• Association;

• Body of persons;

• Branch;

• Business trust;

• Co-operative societies;

• Corporations;

• Limited liability partnership;

• Partnership;

• Property trust fund;

• Property trust;

• Real estate investment trust;

• Representative office and regional office;

• Trust body; and

• Unit trust.

Previous Updates on E-Invoicing

• The workflow of e-Invoicing https://www.ktp.com.my/.../e-invoicing-malaysia.../31jul23

• The timeline of e-Invoicing https://www.ktp.com.my/blog/e-invoicing-malaysia-timeline/2aug23

Source

IRB E-Invoicing Guide version 1.0 https://www.hasil.gov.my/en/e-invoice/

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