(Tax Update) IRBM e-invoice Guideline Version 2.30 (published on 6/4/24)

The Inland Revenue Board of Malaysia (IRBM) recently updated its Software Development Kit (SDK) and guidelines for e-invoice on 6 April 2024. With important deadlines approaching for businesses of different sizes, it's crucial for taxpayers to understand these changes and how they affect their operations.

Here's a simpler breakdown of the updates:

Self-Billed e-Invoice for Importation

Malaysian businesses involved in importing goods and services must now issue a self-billed e-Invoice within a specific timeframe after receiving their Customs import declaration. This requirement aims to streamline tax documentation and compliance for imports, with deadlines tailored to the date of receiving the Customs declaration.

To be more specific, for importation of goods, the self-billed e-Invoice is required to be raised by the end of the month following the month in which Customs declaration (K1) is obtained. As an example, if K1 is obtained anytime during the month of August, the self-billed e-Invoice is required to be raised by 30th September.

As for importation of services, self-billed e-Invoice is required to be issued latest by the end of the month following the month in which the rule for timing of imported service tax is satisfied, i.e. earlier of payment and receipt of invoice. For avoidance of doubt, the requirement for self-billed e-Invoice applies regardless of whether imported service tax is required to be accounted on the invoice.

FOREX Clarification

The recent updates provide clarity on handling foreign exchange (FOREX) rates in transactions involving foreign currencies. Businesses have the flexibility to choose the FOREX rate based on their internal policy unless specific regulatory requirements dictate otherwise.

This clarification helps businesses in accurately reporting their financial transactions involving foreign currencies.

Non-Monetary Transactions

The IRBM has clarified that e-Invoicing requirements extend to non-monetary transactions, such as incentive trips and gift vouchers given to dealers. This update ensures that all forms of transactions, whether monetary or non-monetary, are appropriately documented and compliant with e-Invoicing regulations.

Credit Notes for Multiple e-Invoices

It's now confirmed that businesses can issue a single credit note that adjusts the transaction values of multiple e-Invoices. This flexibility is particularly useful for businesses dealing with returns or adjustments across several invoices, simplifying the process without being constrained by character limits.

Consolidated e-Invoices for Individuals

Businesses can issue consolidated e-Invoices for payments made to individuals, simplifying documentation and reporting.

However, payments to individuals acting as agents, dealers, or distributors require individual transactional self-billed e-Invoices, addressing tax compliance more rigorously.

Interest Payments

The updates outline specific requirements for issuing e-Invoices or self-billed e-Invoices for interest payments. The responsibility for issuing these documents depends on the nature of the transaction and the parties involved, aiming to close tax compliance gaps effectively.

Flexibility for Statements as e-Invoices

There's now greater flexibility in using statements as e-Invoices. Businesses can include adjustments and rebates within these documents, facilitating a more streamlined approach to e-Invoicing and compliance.

Size Limitation

New size limitations for e-Invoice submissions to the IRBM have been introduced, including a maximum submission size of 5MB, a cap of 100 e-Invoices per submission, and a maximum size of 300KB per e-Invoice. These limits are crucial for managing the data flow to the IRBM efficiently.

Digital Signature

Businesses can utilize the digital signature of their service provider for e-Invoice submission to the IRBM. This provision allows for a seamless integration and submission process, ensuring the authenticity and integrity of the e-Invoices submitted.

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