E-Invoice Malaysia
What is E-Invoice Malaysia
E-invoices are digital documents that replace paper or electronic invoices, credit notes, and debit notes in Malaysia. They contain the same essential information as traditional documents, such as supplier and buyer details, item description, quantity, price excluding tax, tax, and total amount. E-Invoices record transaction data for daily business operations.
Digitalise tax and financial reporting
Aligns financial reporting and processes to be digitalised with industry standards for micro, small and medium-sized enterprises
Reduce Manual Efforts and Human Errors
Unite your invoicing process by electronically creating and submitting transaction documents to reduce manual efforts and human errors.
Seamless System Integration for Efficient Tax Reporting
Connect your financial systems to streamline your tax reporting process and ensure accurate and timely compliance.
Optimize Your Invoicing Process with Digital Documents
Save money and time by electronically creating and submitting E-invoices in Malaysia. E-Invoices streamline your invoicing process and reduce manual errors.
How does E-Invoice Malaysia work?
Refer to the IRBM E-Invoice guideline version 1.0, from the moment a sale is made or a transaction occurs, the E-Invoice Malaysia workflow facilitates seamless sending and receiving electronic invoicing between suppliers and buyers. The process begins with the supplier issuing an E-Invoice through the MyInvois Portal or API. This E-Invoice Malaysia is then validated real time and stored securely in IRBM’s database. Buyers can easily access their historical E-Invoice through the MyInvois Portal, ensuring transparent and efficient financial recordkeeping.
Who are required to implement E-Invoice Malaysia?
E-Invoicing will be mandatory for all business’s owners based on their turnover or revenue thresholds, and will be implemented in phases. The roll-out of E-Invoice has been planned with careful consideration, considering the turnover or revenue thresholds, providing businesses with sufficient time to adapt.
Companies need to take proactive steps to ready themselves for the forthcoming E-Invoicing requirement by evaluating their existing IT systems, ERP system, and tax compliance procedures to guarantee alignment with the updated standards. While the Budget proposal extends the preparation period for taxpayers, the delay is not notably substantial in practical terms.
Below is the E-Invoice implementation timeline based on budget 2024 announcement:
Targeted Taxpayers | Implementation Date |
Taxpayers with an annual turnover or revenue of more than RM100 million | 1 August 2024
*Initially 1 June 2024 |
Taxpayers with an annual turnover or revenue of more than RM25 million and up to RM100 million | 1 January 2025 |
All taxpayers | 1 July 2025 |
Overview of the E-Invoice Model
To facilitate transition to E-Invoice Malaysia, 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 taxpayer’s selection:
- MyInvois Portal
- 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
Supported E-Invoice Malaysia Format
Non-Supported E-Invoice Malaysia Format
What is TIN Number?
In Malaysia, a TIN, or Tax Identification Number, is officially known as ‘Nombor Pengenalan Cukai.’ It is a unique identifier assigned to individuals and entities registered with the Inland Revenue Board of Malaysia (IRBM) as taxpayers. The purpose of the TIN is to distinguish taxpayers, maintain tax records, and facilitate tax compliance monitoring and anti-evasion measures.
The Inland Revenue Board of Malaysia (LHDN) recently introduced an updated TIN format, effective from January 1, 2023. Under the previous format, TINs were 12 or 13-digit numbers, with the initial letter(s) indicating the taxpayer type (e.g., ‘SG’ for individual residents or ‘C’ for companies). The remaining digits served as a unique identifier.
Under the new format, all TINs will start with ‘IG,’ signifying ‘Individual taxpayer.’ The following 11 digits will remain the same as in the old TIN. To check your TIN online or get more details about this new format, visit the LHDN website.
72 hours grace period for Buyer / Seller for cancellation and Rejection
Rejection and cancellation workflow
A significant highlight of these changes of E-Invoice regulation, based on the E-Invoice Malaysia guideline version 2.1 release by LHDN, is the introduction of a 72-hour grace period. This grace period empowers businesses to make necessary adjustments to their E-Invoices within 72 hours of the initial invoice issuance. It serves as a valuable opportunity to rectify any errors or discrepancies on the invoice. Understanding how this grace period operates and when to use debit notes and credit notes is vital for businesses operating in Malaysia to ensure accurate and compliant invoicing practices.
Here’s a more detailed breakdown of the 72-hour E-Invoicing grace period
Businesses have the option to reject or request the cancellation of an E-Invoice within 72 hours from its issuance.
Once this 72-hour window elapses, further modifications to the E-Invoice are not permitted.
If changes are necessary after the grace period, businesses must issue a new invoice, debit note, credit note, or refund.
It’s crucial to maintain meticulous records of these adjustments and adhere to the relevant regulations to ensure compliance with the guidelines set by the Inland Revenue Board (IRB).
Buyer-Requested Rejection:
Within the first 72 hours of receiving an E-Invoice, the buyer can initiate a request for its rejection.
The seller will receive a notification when the buyer requests rejection.
The seller’s approval is required for the buyer’s rejection request to be accepted, resulting in the cancellation of the E-Invoice.
If the seller does not approve the buyer’s request within the 72 hours, the E-Invoice will automatically be considered valid.
Seller-Initiated Cancellation:
Sellers also have the option to initiate the cancellation of an E-Invoice within 72 hours.
If the seller cancels the E-Invoice, the buyer is relieved of the obligation to make the payment specified on the invoice.
Beyond the 72-hour mark, the E-Invoice will be automatically deemed valid.
Any subsequent modifications to the E-Invoice will require to issue a debit or credit note.”
Why chooses Our Software?
It is important to prepare in advance for the upcoming E-Invoicing system in Malaysia, as invoicing will be mandatory to be implemented by July 2025, to all business owners in Malaysia. This is why you should be considering our Synergy Software to be your software provider.
Synergy Software provide a user-friendly and secure solution for E-Invoicing Malaysia that seamlessly integrates with your existing processes such as invoicing framework. From compliance to customization and cost savings, we’ve got you covered. Join us to simplify your financial workflows, invoice solutions, increase efficiency, and stay ahead in the world of modern invoicing
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