How to Issue e-Invoices for E-Commerce Transactions

Understanding E-Commerce Transactions

E-commerce transactions involve the sale or purchase of goods or services over networks designed for placing or receiving orders. While the goods or services are ordered online, the payment and ultimate delivery do not necessarily need to be conducted online. This blog will clarify the guidelines for managing e-invoices in e-commerce transactions, ensuring compliance with Malaysian regulations.

e-commerce transaction

Definition of E-Commerce Transactions

E-commerce transactions can occur between various parties, including enterprises, households, individuals, governments, and other public or private organizations.

Issuance of E-Invoice from E-Commerce Platform Provider to Purchaser

Currently, e-commerce platform providers issue an invoice, bill, or receipt to record transactions on their platforms, such as sales of goods or provision of services. With the implementation of e-invoicing, platform providers must:

1. Act as Supplier: E-commerce platform providers must assume the role of Supplier in issuing either:
   • An e-invoice upon the Purchaser’s request, or
   • A receipt if no e-invoice is requested by the Purchaser.
2. Compliance: The issuance of e-invoices is required for complying with relevant tax legislation and does not change the nature or commercial liability of the transaction.
3. Aggregation of Transactions: If the Purchaser does not require an e-invoice, the platform provider can aggregate transactions with such Purchasers on a monthly basis and submit a consolidated e-invoice to the IRBM within seven calendar days after month-end.
4. Roles in E-Invoicing:
   • Supplier: E-commerce platform provider.
   • Buyer: Purchaser.
5. Merchant Requirements: Merchants and service providers are not required to issue an e-invoice or receipt to the Purchaser.
6. Required Information: The information required in the e-invoice should assist the e-commerce platform provider in its issuance.

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Issuance of Self-Billed E-Invoice by E-Commerce Platform Provider

Upon concluding a sale or transaction on the platform, the Merchant or Service Provider is eligible to receive payment from the e-commerce platform provider. With the implementation of e-invoicing, platform providers must:

1. Issue Self-Billed E-Invoice: The platform provider must issue a self-billed e-invoice for all transactions concluded on the platform to comply with relevant tax legislation.
2. Roles in Self-Billed E-Invoicing:
   • Supplier: Merchant or Service Provider.
   • Buyer: E-commerce platform provider, which assumes the role of Supplier to issue a self-billed e-invoice.
3. Issuance Process: The process of issuing a self-billed e-invoice follows the detailed e-invoice workflow provided under the e-Invoice Guideline.
4. Submission Frequency: The platform provider can submit self-billed e-invoices for IRBM’s validation according to their current issuance frequency (e.g., daily, weekly, monthly).

Required Information: The information required in the self-billed e-invoice should assist the platform provider in its issuance.

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Issuance of E-Invoice from E-Commerce Platform Provider to Merchant or Service Provider

E-commerce platform providers often charge Merchants or Service Providers for the use of the platform. Upon implementation of e-invoicing, platform providers must:

1. Issue E-Invoice: The platform provider must issue an e-invoice for charges imposed on the Merchant or Service Provider for using the platform.
2. Roles in E-Invoicing:
   • Supplier: E-commerce platform provider.
   • Buyer: Merchant or Service Provider.
3. Issuance Process: The process of issuing the e-invoice should follow the detailed e-invoice workflow as discussed in the e-Invoice Guideline.
4. Required Information: The information required in the e-invoice should assist the platform provider in its issuance.

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Conclusion

Properly managing e-invoices for e-commerce transactions is essential for compliance with Malaysian regulations and for accurate financial reporting. By following the guidelines outlined above, you can ensure your e-invoices are accurate and compliant.