Malaysia Goes E-Invoicing: What You Need to Know

Malaysia's E-Invoicing Journey: Benefits, Timelines, and Key Points.

The clock is ticking! With only 5 months remaining until August 1st, 2024, e-invoicing will become mandatory for Malaysian businesses with income or annual sales exceeding RM100 million. This blog post equips you with the key points you need to know: from the benefits and key dates to the different types of e-invoices and available submission methods.

What is e-invoicing?

E-invoicing, or electronic invoicing, replaces paper invoices with digital ones, simplifying and streamlining the invoicing process for businesses and the government.

Benefits of e-Invoicing:

• Increased efficiency: Saves time and effort for businesses and the government.
• Reduced costs: Eliminates printing, postage, and storage costs.
• Improved accuracy: Reduces errors from manual data entry.
• Enhanced transparency: Provides a clear audit trail.
• Environmental benefits: Reduces paper usage.

72-Hour Grace Period:

A crucial feature of e-invoicing is the 72-hour grace period. This allows:

• Both sellers and buyers to reject or request cancellation of an e-invoice within 72 hours of its issuance.
• Sellers to approve buyer requests for rejection or cancel the e-invoice themselves.
• No modifications to the e-invoice after the 72-hour window.

Important Implementation Dates:

Remember: Starting from August 1st, 2024, e-invoicing will become mandatory for businesses with income or annual sales exceeding RM100 million.

Here's a table outlining the entire implementation timeline by targeted taxpayers and their respective dates:

Types of E-Invoices to be Issued:

As you transition to e-invoicing, it's important to understand the different types of e-invoices you might encounter:

• Invoice: The standard document for a transaction between a supplier and a buyer, including self-billed invoices used for expenses.

• Credit Note: Issued to correct errors, apply discounts, or account for returns, reducing the original invoice's value without a refund.

• Debit Note: Used to indicate additional charges on a previously issued e-invoice.

• Refund: Issued by a supplier to confirm a refund of the buyer's payment, typically associated with returned items.

E-Invoice Requirements:

While every e-invoice must comply with specific requirements as outlined in the LHDN e-Invoice Guideline

(released on September 29th, 2023), some key details include:

• Supplier and Buyer information: Tax identification numbers (TIN), registration/identification numbers.
• Invoice details: e-invoice code/number, date, description of goods/services.
• Tax details: tax type, rate, amount, total amounts excluding and including tax.

For a complete list of all 53 required fields and specific details, please refer here or the official LHDN e-Invoice Guideline.

Resources for Businesses:

• Lembaga Hasil Dalam Negeri Malaysia (LHDNM): https://www.hasil.gov.my/e-invois/
• Malaysia Digital Economy Corporation (MDEC): https://einvoice.mdec.com.my/

E-Invoice Submission Methods:

MyInvoice Portal:

• Suitable for Micro, Small, and Medium-sized Enterprises (MSMEs) due to its user-friendly interface.
• Accessible to all taxpayers.
• May not be efficient for large volumes of data, as manual input might become cumbersome.
• Businesses cannot connect their existing accounting systems to the MyInvoice Portal.

Application Programming Interface (API):

• Ideal for taxpayers with a large volume of transactions, as it automates the submission process.
• Requires adjustments to existing systems to integrate with the API.
• Connects directly to the Inland Revenue Board of Malaysia (IRBM) through Peppol-ready ERP solution Solution Providers (PRSPs) or Peppol Access Point Service Providers (SPs).

The e-invoicing deadline is fast approaching! Act now to ensure a smooth transition.

Here's what you need to do:

• Evaluate your current invoicing process: Identify areas for improvement in costs and efficiency.

• Find the right solution: Choose/ upgrade an e-invoicing solution that aligns with your business needs, considering ease of use, scalability, and integration capabilities.

• Automate transmission: Integrate your chosen solution with your ERP system to streamline the process.

• Train your team: Educate your staff on the new e-invoicing process.

Need help on e-invoicing? Goldsoft is here to assist! We can help address your current e-invoicing needs. Contact us at 603-2732 8833/ 016-6611086 or fill up the form below to discuss how we can provide an e-invoice-ready ERP solution to ensure a smooth and efficient transition.