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Understand Malaysia e-Invoice

To support the growth of the digital economy, the Government intends to implement e-Invoice in stages in an effort to enhance the efficiency of Malaysia’s tax administration management. It is in line with the Twelfth Malaysia Plan, where the focus is on strengthening the digital services infrastructure and digitalising the tax administration.

The e-Invoice will enable instant or near-instant validation and storage of transactions, catering to Business-to-Business (B2B), Business-to-Consumer (B2C) and Business-to-Government (B2G) transactions.

The Inland Revenue Board (IRB) has uploaded the E-Invoicing Guideline Year 2023 in its official portal as a reference and guide to taxpayers covering the scope as follows:

  • E-invoicing implementation concept;
  • E-invoicing implementation timeline;
  • The process of issuing and submitting e-invoices to IRB;
  • Taxpayer readiness assessment guide; and
  • Specification of required data fields.

The Inland Revenue Board (IRB) has further issued e-Invoice Guideline (Version 2.0) and e-Invoice Specific Guideline (Version 1.0).

It contains updates such as persons exempted from issuing e-Invoice, e-Invoice validation,  rejection/cancellation of e-Invoice, and data fields for e-Invoice and annexure to e-Invoice, amongst others.

e-Invoice Specific Guideline (Version 1.0) to specifically explain the following transactions:-

  • Transactions with buyers
  • Statements or bills on a periodic basis
  • Disbursement and reimbursement
  • Employment perquisites and benefits
  • Certain expenses incurred by the employee on behalf of the employer
  • Self-billed e-Invoice
  • Transactions that involve payments in monetary form to agents, dealers or distributors
  • Cross-border transactions
  • Profit distribution
  • Foreign Income
  • Currency exchange rates
  • Application Programming Interface (API) overview, and
  • Cybersecurity

Taxpayers can access and download these guidelines along with questions (FAQ) through the link https://www.hasil.gov.my/en/e-invoice/

e-Invoice Implementation Timeline

e-Invoice will be implemented in phases to ensure smooth transition.  Below is the mandatory e-Invoice implementation timeline:

 

 

No. Targeted Taxpayers Implementation Date

 
1. Taxpayers with an annual turnover or revenue of more than RM100 million 1 August 2024

 
2. Taxpayers with an annual turnover or revenue of more than RM25 million and up to RM100 million 1 January 2025

 
3. All taxpayers 1 July 2025

 

 

e-Invoice Overview Workflow

Picture below demonstrates an overview of the e-Invoice workflow from the point a sale is made or transaction undertaken, and an e-Invoice is issued by the supplier via MyInvois Portal or API, up to the point of storing cleared e-Invoices on IRB’s database for taxpayers to view their respective historical e-Invoices.

Malaysia e-Invoice

 

e-Invoice Model

To facilitate taxpayers’ transition to e-Invoice, IRB has developed two distinct e-Invoice transmission mechanisms:

a. A portal (MyInvois Portal) hosted by IRB; and

b. Application Programming Interface (API).

Taxpayers can select the most suitable mechanism to transmit e-Invoice to IRB, based on their specific needs and business requirements.

 

No.

 

 Mechanism

 

 Key Features

 

 Considerations

 
1. MyInvois Portal

 

 Enables individual generation through a comprehensive form and the option for batch generation through spreadsheet upload for processing multiple transactions

 
  • Accessible to all taxpayers
  • Suitable for Micro, small and medium-sized enterprises (MSMEs)
  • May not be efficient for large volume of data
  • Businesses that need to issue e-Invoice but API connection is unavailable 
2. API

 

 Enables businesses to conveniently transmit high-volume of transactions

 
  • Requires upfront investment in technology and adjustments to existing systems. API connection may be made directly to IRBM or through intermediary technology providers
  • Ideal for large taxpayers or businesses with substantial transaction volume 

 

Mandatory and Optional Fields for e-Invoice

Appendices 1 and 2 of the E-Invoicing Guideline set out a list of required and optional fields for an e-Invoice and annexure to an e-invoice. Taxpayers are free to include additional fields, where required.

Assessing Readiness of e-Invoice

To ensure that businesses are ready for the implementation of e-Invoice in the upcoming months, here are a few key steps that can be carried out to assess readiness and standardisation:

  1. Allocate and equip personnel with the necessary capabilities to adopt and oversee the implementation of e-Invoice;
  2. Determine availability of data sources and structure, current IT capabilities to support system readiness and processes to comply to e-Invoice requirements and obligations; and
  3. Review current processes in issuing transaction documents (i.e., invoice, debit note, credit note, refund note).

If you require assistance with e-invoicing, feel free to reach out to 3E Accounting today. We are here to provide you with the support you need.