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e-Invoice



e-Invoice


Malaysia is in the process of implementing a mandatory e-Invoicing system to streamline tax administration and improve efficiency. Here's a quick breakdown of e-Invoicing in Malaysia:


What is it?


An e-Invoice is a digital record of a transaction between a seller and a buyer. It's sent through a government portal for real-time validation and record-keeping.


Who does it apply to?


E-Invoicing applies to all businesses undertaking commercial activities in Malaysia, including domestic and international transactions. This covers B2B, B2C, and B2G transactions.


Implementation Timeline:


The Inland Revenue Board (IRB) is implementing e-Invoicing in phases:


  • August 2024: Mandatory for businesses with an annual turnover exceeding RM100 million.

  • January 2025: Expands to businesses with a turnover between RM25 million and RM100 million.

  • July 2025: Becomes mandatory for all taxpayers, regardless of turnover.


Benefits:


  • Streamlined invoicing: Creates a unified process for issuing and submitting invoices electronically.

  • Reduced errors: Automates data entry, minimizing manual errors.

  • Faster tax filing: Simplifies tax return filing through seamless data integration.

  • Improved compliance: Ensures adherence to tax regulations.


What is Malaysia's e-invoicing 2024?


Malaysia's e-invoicing for 2024 is currently in its first phase of mandatory implementation. This means that as of August 1, 2024, e-invoicing becomes compulsory for businesses with an annual turnover exceeding RM100 million.


Here's a breakdown of Malaysia's e-invoicing in 2024:


  • Who needs to use e-invoicing: Businesses exceeding RM100 million in annual turnover.

  • When does it become mandatory:  August 1, 2024.

  • What kind of transactions: Applicable to Business-to-Business (B2B), Business-to-Consumer (B2C) and Business-to-Government (B2G) transactions.


Additional points to consider:


  • Businesses below the threshold (RM100 million) can still voluntarily use e-invoicing in 2024.

  • The mandatory requirement will be progressively rolled out to encompass all businesses by July 1, 2025.


For more information on Malaysia's e-invoicing initiative, you can refer to the Inland Revenue Board of Malaysia's website: [Inland Revenue Board Malaysia e invoice ON hasil.gov.my]


Is e-invoicing mandatory in Malaysia?


E-invoicing in Malaysia is becoming mandatory, but it's being phased in.  Here's the current status:


  • Mandatory:  As of today, June 20, 2024,  e-invoicing is mandatory for businesses with an annual turnover exceeding RM100 million.

  • Voluntary: Businesses below the threshold can still use e-invoicing if they choose to, but it's not required yet.

  • Future Mandates:  E-invoicing will become mandatory for all businesses in Malaysia by July 1, 2025. The next phase rolls out in January 2025 for businesses between RM25 million and RM100 million turnover.


What is the turnover for e-invoicing in Malaysia?


The turnover threshold for mandatory e-invoicing in Malaysia depends on the implementation phase. Here's a breakdown:


  • Current Phase (as of June 20, 2024): Mandatory for businesses with an annual turnover exceeding RM100 million.

  • Future Phases:

  • January 1, 2025:  Becomes mandatory for businesses with a turnover between RM25 million and RM100 million.

  • July 1, 2025: Mandatory for all taxpayers, regardless of turnover.


Important Note: While e-invoicing is not mandatory for businesses below the current threshold (RM100 million) in 2024, they can still voluntarily adopt the system.


What are the rules for invoice in Malaysia?


Invoices in Malaysia, regardless of being traditional paper invoices or e-invoices,  need to follow specific guidelines. Here's a breakdown of the key invoice rules:


General Requirements:


  • Identification: The invoice must clearly state "Tax Invoice" prominently.

  • Details: Include essential details like:

  • Seller's name, address, and Goods and Services Tax (GST) registration number (if applicable)

  • Buyer's name, address

  • Unique and sequential invoice number

  • Invoice date

  • Description of goods or services supplied

  • Quantity or volume of goods or services

  • Taxable value (if applicable)

  • Applicable tax rate (if applicable)

  • Total invoice amount (including tax)

  • Due date for payment (if different from invoice date)

  • Payment terms (optional)


Additional Considerations:


  • Language: While Malay is the national language, invoices can be issued in English or Bahasa Malaysia.

  • Retention: Both sellers and buyers are required to keep invoices for at least 7 years from the invoice date.

  • E-invoicing Requirements: If your business falls under the mandatory e-invoicing phase,  your e-invoices must comply with the specific format and data requirements set by the Inland Revenue Board of Malaysia (IRBM). This includes additional details like QR codes for validation.


Who is mandatory for an e-invoice?


In Malaysia, the requirement for e-invoicing is being implemented in phases based on a business's annual turnover.  Here's who is currently mandatory for e-invoicing:


  • As of June 20, 2024: Businesses with an annual turnover exceeding RM100 million are mandatory for e-invoicing.


This means any business exceeding this threshold must generate and submit their invoices electronically through the government-approved channels.


Future Mandates:


  • January 1, 2025: The mandatory requirement will expand to include businesses with a turnover between RM25 million and RM100 million.

  • July 1, 2025: E-invoicing will become compulsory for all taxpayers in Malaysia, regardless of their annual turnover.


Important Note: Even if your business falls below the current mandatory threshold, you can still voluntarily adopt e-invoicing in Malaysia.


How to submit an e-invoice in Malaysia?


There are two main methods for submitting e-invoices in Malaysia:


  1. MyInvois Portal: This is a government-provided online portal suitable for businesses with a low volume of transactions (typically Micro, Small, and Medium Enterprises - MSMEs). Here's the process:

  • Generate e-Invoice: Create your e-invoice with all the required data.

  • Submit to IRBM:  Log in to the MyInvois portal and submit your e-invoice for validation.

  • Validation and Notification: The Inland Revenue Board of Malaysia (IRBM) will validate the invoice and notify you and the buyer of the outcome.

  • Share with Buyer: Once validated, you are responsible for sharing the cleared e-invoice (including a QR code) with your buyer.

  1. API (Application Programming Interface): This method is ideal for large businesses with a high volume of transactions. It allows for integration with your existing accounting or invoicing software for a more automated process. Here's a general overview:

  • API Integration:  Your accounting software or a third-party provider needs to be integrated with the IRBM's API.

  • e-Invoice Generation: The software generates e-invoices following the specified format.

  • Automated Submission: The API automatically transmits the e-invoices to the IRBM for validation.

  • Validation and Notification: Similar to the MyInvois portal, the IRBM validates and sends notifications.

  • Sharing with Buyer:  You are responsible for sharing the cleared e-invoice with the buyer.


Important Note: Regardless of the chosen method, it's crucial to ensure your e-invoices adhere to the specific format and data requirements set by the IRBM.


For detailed information and resources on e-invoice submission methods,  refer to the Inland Revenue Board of Malaysia's website: [Inland Revenue Board Malaysia e invoice ON hasil.gov.my]


Resources:


For a comprehensive guide on tax invoices in Malaysia, you can refer to:


  • Inland Revenue Board of Malaysia website: [Inland Revenue Board Malaysia e invoice ON hasil.gov.my]

  • Bestar's guide on Tax Invoice in Malaysia: [Bestar tax invoice malaysia ON bestar-my.com]




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