The Inland Revenue Board of Malaysia (IRBM) started mandatory e Invoice Malaysia making it compulsory for all registered businesses to generate e invoice Malaysia for B2B, B2G, and B2C transactions.
The execution of e invoice Malaysia marks a significant move towards the digital transformation of the country’s tax administration and business operation. As the e invoice Malaysia implementation timeline progresses, it is essential for businesses to stay updated on the latest developments, deadlines, and compliance obligations to ensure a smooth transition.
Synergy Software is one of the leading e-invoice software Malaysia providers, offering powerful and user friendly solutions to help businesses stay compliant and manage invoices smoothly.
What Is e Invoice Malaysia?
e Invoice Malaysia is a government led system that replaces traditional paper invoices with digital invoices. The goal is to create a more transparent, efficient, and accurate way of reporting business transactions for tax purposes.
Unlike a regular invoice, an e invoice goes through the IRBM system in real-time. Once approved, the invoice comes with a Unique Identification Number (UIN) and a QR code, which makes it easy to verify and track.
Why Was e Invoice Malaysia Introduced?
The Malaysian government launched e invoice Malaysia to modernize the country’s tax system and encourage digital transformation. The system:
- Makes it easier for businesses to manage tax compliance
- Reduces errors and fraud
- Encourages proper record keeping
- Boosts the digital economy
- Helps in better audit and financial transparency
With businesses going digital, e-invoicing ensures that all transactions are recorded properly and fairly, which helps both companies and the government.
Key Timelines for e Invoice Malaysia
e Invoice Malaysia is being implemented in phases, giving businesses time to prepare. Here is the official rollout plan:
- 1 August 2024 – Businesses with annual turnover above RM100 million must start using e-invoicing.
- 1 January 2025 – Businesses with annual turnover between RM25 million and RM100 million are required to start.
- 1 July 2025 – All other businesses, regardless of size, must implement e-invoicing.
This phased approach gives companies a chance to adjust their processes and ensure their systems are ready. If your business falls in the first two groups, you should already be using or preparing for e-invoicing.
Who Needs to Use e-Invoice Software Malaysia
e Invoice Malaysia applies to all businesses and taxpayers in Malaysia. This includes:
- Companies registered in Malaysia
- Sole proprietors
- Freelancers and consultants
- Government vendors
- International businesses operating in Malaysia
It covers transaction between:
- Business (B2B)
- Businesses and consumers (B2C)
- Business and the government (B2G)
Even some non-business transactions between individuals may be included.
How Does e-Invoice Software Malaysia Work?
Here’s a simple step by step breakdown of how e-invoicing works under the Malaysian system:
1. Create the e-Invoice
The seller (supplier) prepares a digital invoice using e-invoice software Malaysia like Synergy. The invoice must follow the UBL 2.1 format and include 55 required fields (e.g., seller and buyer details, item description, tax amount, total, etc.).
2. Send to IRBM
The e invoice Malaysia is sent to the IRBM’s MyInvois Portal for validation. This ensures the invoice follows the correct format and contains accurate data.
3. Validation by IRBM
The IRBM checks the invoice and returns it with a Unique Identification Number (UIN) and QR code if it is approved.
4. Share with Buyer
The seller sends the validated invoice to the buyer. Buyers can scan the QR code to check the invoice’s authenticity online.
e Invoice Malaysia Scenarios
Scenario 1: Buyer Needs an e-Invoice
If a buyer (individual or company) needs the e-invoice for tax purposes, the seller collects their personal or company details such as:
- For Malaysians: Taxpayer Identification Number (TIN), IC number, or MyTentera number
- For non-Malaysians: TIN and passport number
The seller then issues the e-invoice and submits it for validation.
Scenario 2: Buyer Doesn’t Need an e-Invoice
If the buyer does not need an e-invoice, the seller can issue a regular receipt. However, if the buyer later wants an e-invoice, they can request one before the end of the month in which the transaction occurred.
In such cases, the seller must consolidate all these transactions at the end of each month and submit a monthly consolidated e-invoice to the IRBM within 7 days of the month’s end.
What’s Inside an e Invoice Malaysia?
Each e-invoice contains 55 fields that are necessary for compliance. Some of the most important fields include:
- Seller’s name and tax information
- Buyer’s name and tax information
- Description of goods or services
- Quantity and price
- Taxes applied (e.g., SST or GST)
- Payment details and total amount
- QR code and Unique Identification Number
This detailed data allows the government to verify the transaction, reduce tax evasion, and ensure that businesses report their income correctly.
Benefits of e Invoice Malaysia for Businesses
Here are the main reasons why switching to e-invoicing is a smart move for businesses in Malaysia:
1. Faster Tax Reporting
e-invoices are automatically linked to your tax reporting system, which means fewer delays and less manual work when submitting tax returns.
2. Better Accuracy
Since e invoice Malaysia follows a strict digital format, the chances of mistakes or missing information are much lower.
3. Improved Cash Flow
e-Invoicing speeds up the billing process, helping you get paid faster and improving your company’s cash flow.
4. Easier Audits
Because all your invoices are stored and validated digitally, preparing for audits becomes quicker and less stressful.
5. Lower Costs
No need to print, file, or post paper invoices. Digital systems reduce your admin costs.
6. Secure Data Handling
Validated e-invoices are more secure and less likely to be tampered with, reducing the risk of fraud.
7. Supports International Trade
e-Invoicing makes it easier to do business with international clients, as it aligns with global digital tax practices.
8. Eco-Friendly
By cutting out paper invoices, your business helps reduce environmental impact.
How to Get Started with e Invoice Malaysia
Ready to implement e-invoicing in your business? Here’s a simple checklist to follow:
1. Check Your Business Turnover
Identify when your business must comply based on annual turnover. Refer to the rollout dates mentioned above.
2. Choose an e-Invoice Software Malaysia
Pick a reliable and compliant e-invoice solution like Synergy Software. Make sure it supports UBL 2.1 format and integrates well with your existing systems.
3. Register with IRBM
Register your business with the MyInvois Portal provided by the IRBM.
4. Train Your Team
Make sure your staff understands the new e-invoice process and how to use the software properly.
5. Test and Go Live
Run test invoices to make sure everything works. Once ready, start issuing validated e-invoices for all your transactions.
How Can Synergy Software Help Your Business With e Invoice Malaysia?
Synergy Software is approved by MDEC as an e invoice Malaysia solution provider. It connects your business systems with the IRBM e-invoicing system to automate the process and make sure your e-invoices fully follow the rules.
- Enterprise Solutions: Synergy Software offers strong solutions for large businesses. It connects easily with any ERP or business system to create e-invoices correctly and quickly.
- Sales Channel Integration: Synergy Software links all your sales channels both online and in-store into one system. This helps make sure every sale is included in one correct e-invoice.
- Buyer Portal: Synergy Software gives buyers a web portal and app so they can create e-invoices themselves. This helps speed up billing, reduce waiting times, and improve the customer experience.
Conclusion
The shift to e invoice Malaysia is a major step in the country’s journey toward a fully digital economy. While the transition may take some effort, the long-term benefits for your business are clear such as faster processes, better compliance, lower costs, and greater efficiency.
By choosing a trusted e invoice Malaysia partner like Synergy Software, you can make this transition smooth and worry free. Synergy offers the tools and support you need to issue, validate, and manage e-invoices with ease ensuring your business stays ahead of the curve.
Make the smart move today and get ready for a digital future with e Invoice Malaysia.
