As Malaysia moves into the e-Invoice era, more businesses — including freelancers, small vendors, and gig workers — will encounter a concept called self-billed e-Invoice. This format is part of the Inland Revenue Board’s (LHDN) broader e-Invoicing framework, which will soon become mandatory for all businesses.
If you’re unsure whether you need to issue an invoice or your customer creates one on your behalf, this article breaks it down clearly.
📊 Overview: What is a Self-Billed e-Invoice?
A self-billed e-Invoice is an e-Invoice generated by the buyer (not the seller) and then submitted to LHDN. This happens in cases where:
- The supplier (seller) is not equipped to issue an e-Invoice
- The business arrangement allows the buyer to prepare the invoice instead
Scenarios Requiring Self-Billed E-Invoices in Malaysia:
-
Payments to Agents, Dealers, and Distributors (ADDs):
- Required when a buyer pays commissions or compensation to ADDs.
- Purchases from Foreign Sellers:
- Required if the Malaysian buyer buys goods/services from a foreign seller who does not issue an e-invoice.
-
Required when profits are distributed by entities that are:
- Not publicly listed, and
- Not single-tier companies.
- Required for platforms (e.g., Shopee, Lazada) to issue on behalf of sellers who do not issue their own e-invoices.
- Required for any winnings paid out.
- Required when goods/services are acquired from individuals not conducting business.
-
Required unless:
- Interest is charged by financial institutions to the public.
- An employee pays interest to their employer.
- A foreign entity pays interest to a Malaysian taxpayer.
- Required if the insurer does not issue an e-invoice for claim or benefit payments.
- Profit Distribution:
- E-Commerce Transactions:
- Payouts to Betting and Gaming Winners:
- Acquisition from Individual Taxpayers (Non-Business):
- Interest Payments:
- Claims, Compensation, or Benefit Payments from Insurers:
According to LHDN, self-billed e-Invoices are allowed if both parties agree in writing. The buyer must:
- Inform the supplier in advance
- Generate and validate the e-Invoice through MyInvois portal or API
- Provide a copy to the seller after submission
Even though the buyer prepares the invoice, it still includes:
- Supplier’s name and tax identification number (TIN)
- Description of goods/services
- Amount, tax breakdown, and total
- Date and payment details
If you’re a small business owner or independent contractor:
✅ Check if your clients are transitioning to e-Invoice
✅ Ask if they’ll self-bill on your behalf
✅ Provide your full details (name, TIN, contact info)
✅ Request a copy of each e-Invoice generated under your name
If you’re a business buying from small vendors:
✅ Get written consent from suppliers
✅ Ensure your system can issue and submit self-billed e-Invoices
✅ Keep proper records for tax and audit purposes
🔍 Conclusion
Self-billed e-Invoices are now an essential part of Malaysia’s e-Invoicing framework, especially for businesses dealing with freelancers or small vendors. Understanding how and when to use them helps ensure compliance, reduce delays, and simplify day-to-day operations. Make sure your processes are aligned with current LHDN requirements.
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