Frequently Asked Questions About E-Invoicing in Malaysia

The mandatory rollout of e-invoicing in Malaysia began on August 1, 2024. While the Inland Revenue Board of Malaysia (IRBM) has provided extensive guidelines, questions and uncertainties may still linger for businesses.

To help clarify these points, this article offers a comprehensive list of Frequently Asked Questions (FAQs) with detailed answers.

E-Invoice Basics: FAQs

What is an E-Invoice?

An e-invoice is a digital record documenting a transaction between a seller (supplier) and a purchaser (buyer). This record is submitted to the government portal for validation and record-keeping purposes. The e-invoice encompasses all standard invoice details, along with a Unique Identification Number (UIN) assigned by the government system after verifying core data fields, such as Tax Identification Number (TIN) and Malaysian Company Registration Identifier (MCIR). It also includes a QR code, enabling online validation of the e-invoice.

What Types of Transactions are Covered Under E-Invoicing?

E-invoicing in Malaysia applies to various transaction types, including Business to Business (B2B), Business to Customer (B2C), and Business to Government (B2G) transactions.

Which Documents Fall Under the Scope of E-Invoices?

The e-invoice system encompasses invoices, credit notes, debit notes, and refund notes.

Is E-Invoicing Only Applicable to Domestic Transactions in Malaysia?

No, e-invoicing is required for both domestic and international transactions.

What are the Timelines to Generate E-Invoices?

The IRBM has implemented a phased approach for mandatory e-invoicing based on company turnover. Originally slated to commence on June 1, 2024, the start date was revised to August 1, 2024, as announced in Malaysia Budget 2024. Here is the updated timeline:

Which E-Invoice File Formats are Accepted by IRBM for Validation?

The IRBM accepts e-invoices in either XML or JSON file formats, as detailed in their official guidelines.

What Incentives are Available for Taxpayers to Adopt E-Invoices?

The Malaysian government has introduced several tax incentives and grants within Budget 2024 to promote e-invoice implementation. This includes a tax deduction of up to RM50,000 per year of assessment for expenditures on environmental, social, and governance (ESG) initiatives, which includes consultation fees related to e-invoice implementation for Micro, Small, and Medium Enterprises (MSMEs). These incentives are effective from the year of assessment 2024 to 2027.

What are the Penalties for Failing to Issue an E-Invoice?

Failure to issue an e-invoice constitutes an offense under Section 120(1)(d) of the Income Tax Act 1967. Non-compliance can result in a fine ranging from RM200 to RM20,000, imprisonment for up to 6 months, or both, per instance of non-compliance.

Has There Been Any Change to the Mandatory Implementation Date for Taxpayers with an Annual Turnover Exceeding RM100 Million Due to the Income Tax (Issuance of Electronic Invoice) Rules 2024?

No, the implementation date remains unchanged. The rules, effective from October 1, 2024, mandate that taxpayers with an annual turnover exceeding RM100 million comply by this date. Enforcement for non-compliance will also commence from October 1, 2024.

The E-Invoice Process: FAQs

Which Transmission Methods are Available for Sending E-Invoices?

The IRBM provides two methods for transmitting e-invoices:

1. Via the MyInvois Portal provided by the IRBM.
2. Using an Application Programming Interface (API).

Taxpayers can utilize either or both methods to transmit e-invoices, provided that no duplication occurs.

What Data is Required in an E-Invoice?

Issuing an e-invoice necessitates providing 55 data fields, divided into eight categories. Of these, 37 are mandatory, and 18 are optional:

• Address
• Business Details
• Contact Number
• Invoice Details
• Parties
• Party Details
• Payment Info
• Products/Services

In certain scenarios, an annex with 17 additional details may be required by the IRBM. In sum, a seller must include 34 mandatory fields and 17 conditional fields.

Is it Mandatory to Provide Data in E-Invoice Annexures?

Providing data in e-invoice annexures is only mandatory for specific transactions, such as export, import, etc.

Can an Invoice Submitted to IRBM be Cancelled?

Yes, the seller has a 72-hour window from the time of generation to cancel an e-invoice.

Should E-Invoices be Issued for Disbursements and Reimbursements?

Generating e-invoices for disbursements and reimbursements is required under certain conditions.

Can E-Invoices be Edited on the MyInvois Portal After Validation?

No, the seller must cancel the existing e-invoice and reissue a new one.

Does the Invoice Number Change Once Validated by the IRBM?

No, the invoice number remains unchanged. However, a Unique Identifier Number is assigned to the e-invoice once it is validated and approved by the IRBM.

Is a Specific Application Needed to Scan the QR Code?

No, any device capable of scanning QR codes, such as a mobile camera or a dedicated scanner, can be used.

What Information Does the E-Invoice QR Code Contain?

The QR code provides a link to the validated e-invoice, allowing access via the MyInvois portal.

Which E-Invoice Model Will be Adopted?

The IRBM is implementing the Continuous Transaction Control (CTC) Model for real-time or near real-time validation of e-invoices.

Is Invoice Data Secure When Using an API Solution?

Yes, API solutions use network and security monitoring tools to ensure data security and privacy.

Is There a Grace Period for Cancelling an E-Invoice?

Yes, suppliers have 72 hours to cancel an e-invoice post-submission.

Is an E-Invoice Necessary for Refunding Money to Buyers?

A refund note e-invoice is required for returning funds to buyers, except in cases of incorrect or overpayments, and the return of security deposits.

Can Information Be Edited in the MyInvois Portal Post-Validation?

No, changes require cancellation within 72 hours, followed by the issuance of a new e-invoice. Adjustments after 72 hours are made using debit notes, credit notes, or refund note e-invoices.

How Quickly Does the IRBM Validate an E-Invoice?

The IRBM validates e-invoices in near real-time, generally within two seconds.

What is the Timeframe for Issuing E-Invoice Adjustments?

There is no set timeframe for issuing adjustments. Foreign suppliers and buyers not using the MyInvois System make adjustments via debit notes, credit notes, or refund note e-invoices.

Can Multiple Original E-Invoices Be Adjusted with a Single Credit Note?

Yes, multiple e-invoices can be adjusted using a single credit note, debit note, or refund note e-invoice, with each original e-invoice’s IRBM Unique Identifier Number included.

Does IRBM Offer a Template for Sharing Validated E-Invoices?

Taxpayers can use any visual representation of the e-invoice, provided the QR code is correctly embedded.

Is Sharing the Validated E-Invoice Mandatory?

Acknowledging practical issues, the IRBM allows taxpayers to share either the validated e-invoice (XML/JSON file) or a visual representation, or both, until further notice.

E-Invoice Authority in Malaysia: FAQs

Who is the E-Invoice Authority?

The Inland Revenue Board of Malaysia (IRBM) is the designated authority for e-invoice activities.

What is the E-Invoice Malaysia Helpline Number?

The E-Invoice HASiL Help Desk can be contacted at 03-8682 8000, operating 24/7.

How Can I Connect to Malaysia's E-Invoicing Helpdesk?

• Email your query to myinvois@hasil.gov.my.
• Use the feedback form at this link.
• Call the E-Invoice HASiL Help Desk at 03-8682 8000.
• Chat with the IRBM help chatbot.

Will IRBM Provide Technical Guidance on System Integration?

The IRBM is expected to release the SDK and technical guidelines sometime in November 2023.

Will IRBM Conduct Engagement Sessions?

The IRBM is conducting engagement sessions with professional bodies, tax practitioners, and other stakeholders.

Who Should Be Contacted for Further Queries?

Please direct any additional queries to myinvois@hasil.gov.my.

What Security Measures are in Place to Protect Taxpayer Invoice Data?

The LHDNM ensures that the MyInvois System complies with ISO/IEC 27001 Information Security Management System (ISMS) and ISO 22301 Business Continuity Management System (BCMS) Audit Certification.

Who is Responsible for Issuing E-Invoices?

The supplier is primarily responsible for issuing e-invoices, except for certain cases, such as payments to agents or foreign suppliers, where the buyer self-generates the e-invoice.

How are E-Invoices Created and Submitted?

E-invoices are created via the MyInvois Portal or through e-invoicing software using an API and sent to the IRBM for validation.

Can E-Invoices Be Saved as Drafts?

Yes, e-invoices can be saved as drafts before finalization.

MSME FAQs

Are MSMEs Required to Issue E-Invoices?

Yes, all businesses, including MSMEs, must implement e-invoices based on specified timelines. Businesses with turnover below RM150,000 are exempt.

Does the Exemption Apply to All MSMEs?

The exemption does not apply to:

• Businesses with shareholders whose turnover exceeds RM150,000.
• Subsidiaries of companies with turnover exceeding RM150,000.
• Businesses with related companies or joint ventures above RM150,000.

When Must MSMEs Implement E-Invoices if Turnover Exceeds RM150,000?

MSMEs exceeding RM150,000 must implement e-invoicing from January 1 of the second year after surpassing the threshold.

How is the E-Invoice Implementation Requirement Determined for MSMEs?

The requirement is based on audited financial statements, annual tax returns, and turnover exceeding RM150,000 in a given year.

How is the Turnover Threshold Calculated for Sole Proprietorships?

The total turnover across all businesses is considered.

Can an MSME Be Exempt Again if Turnover Falls Below RM150,000?

No, once mandated, exemptions do not reapply.

Are Exempted Businesses Required to Issue Consolidated E-Invoices?

No, voluntary adoption is encouraged.

Is There a Specific Format Required For E-Invoices Shared With Buyers?

The IRBM permits any visual format, provided the QR code is correctly embedded.

Cross Border Transactions and Foreign Supplier/Buyer: FAQs

If Purchasing Goods from a Bonded Warehouse or Free Zone, Is The Customs Reference Number Required?

Yes, when creating a self-billed e-invoice for goods from a bonded warehouse, you must include the customs form reference number.

When Should a Self-Billed E-Invoice Be Issued?

The guideline for situations with multiple shipments, bonded warehouses and other scenarios is as follows:
*Goods are directly drop-shipped from a foreign supplier to a Malaysian buyer.
*Issue a self-billed e-invoice for goods purchased from the foreign supplier (customs form reference optional).
*Issue an e-invoice for goods sold to the Malaysian buyer (customs form reference optional).

Navigating the e-invoicing landscape can be complex. This FAQ guide provides a solid foundation for understanding the key requirements and processes. Be sure to consult the IRBM guidelines for specific scenarios applicable to your business.