Mandatory Electronic Invoicing in Malaysia
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 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.
Key benefits of e-Invoice
The implementation of e-Invoice not only provides seamless experience to taxpayers, but it also improves business efficiency and increases tax compliance. Overall benefits include:
Reduce Manual Efforts and Human Error – Unified invoicing process through creation and submission of transaction document and data electronically.
Facilitate Efficient Tax Filling – Seamless system integration for efficient and accurate tax reporting.
Streamline Operational Efficiency – Enhanced efficiency and significant time and cost saving.
Digitalise Tax and Financial Reporting – Aling financial reporting and processes to be digitalised with industry standards.
Overview of the e-Invoice Model
To facilitate transition to e-Invoice, taxpayers can select the most suitable mechanism to transmit e-Invoices to IRBM, based on their business requirements and specific situation.
There are two (2) options for the e-Invoice transmission mechanisms for taxpayers selection:
- A portal hosted by IRBM
- Accessible to all taxpayers at no cost
- Also accessible to taxpayers who need to issue e-Invoice where Application Programming Interface (API) connection is unavailable
Application Programming Interface (API)
- An API is a set of programming code that enables direct data transmission between the taxpayers’ system and MyInvois system
- Requires upfront investment in technology and adjustments to taxpayers existing systems
- Ideal for large taxpayers or businesses with substantial transaction volumes
The figure below demonstrates an overview of the e-Invoice workflow from the point a sale is made or transaction is undertaken, and an e-Invoice is issued by the supplier via MyInvois Portal or API, up to the point of storing validated e-Invoices on IRBM’s database for taxpayers to view their respective historical e-Invoices.
e-Invoice Implementation Timeline
e-Invoice will be implemented in phases to ensure smooth transition. The roll-out of e-Invoice has been planned with careful consideration, considering the turnover or revenue thresholds, to provide taxpayers with sufficient time to prepare and adapt to the e-Invoice implementation.
Below is the e-Invoice implementation timeline:
|Taxpayers with an annual turnover or revenue of more than RM100 million
|1 August 2024
|Taxpayers with an annual turnover or revenue of more than RM25 million and up to RM100 million
|1 January 2025
|1 July 2025