Malaysia E-invoicing : Transactions with buyer scenarios

Introduction

The Inland Revenue Board of Malaysia (IRBM) issued the e-Invoice Guideline on 21 July 2023. This guideline addresses the scope of e-Invoice implementation, covering the concept and providing step-by-step guidance on the e-Invoice workflow. IRBM recognized the need to offer further guidance on specific areas of e-Invoice to help taxpayers gain a better understanding of certain e-Invoice treatments and ultimately implement e-Invoice successfully.

Objective

The specific guideline aims to provide further guidance on the issuance of e-Invoice related to the following areas:

• Transactions with Buyers
• Statements/Bills on a periodic basis
• Disbursement and reimbursement
• Employment perquisites and benefits
• Certain expenses incurred by employees on behalf of the employer
• Self-billed e-Invoice
• Transactions involving payments (whether in monetary form or otherwise) to agents, dealers, or distributors
• Cross-border transactions
• Profit distribution (e.g., dividend distribution)
• Foreign income
• Currency exchange rate
• E-commerce transactions

In this particular blog, we will focus exclusively on gaining a complete understanding of the topic "Transactions with Buyers."

Transactions with Buyers

Currently, businesses (Suppliers) issue a receipt, bill, or invoice in hardcopy and/or softcopy (e.g., via e-mail) to consumers (Buyers) to record a transaction, such as the sale of products or the provision of services to Buyers for personal consumption.

Upon the implementation of e-Invoice, Suppliers are required to issue e-Invoices for all their transactions. However, certain Buyers, particularly end consumers and specific businesses, may not require an e-Invoice as proof of expense.

To assist Suppliers in complying with e-Invoice requirements and to reduce the burden on both Suppliers and Buyers, the IRBM allows Suppliers to consolidate transactions with Buyers (who do not require an e-Invoice) into a consolidated e-Invoice on a monthly basis.

Where the Buyer Requires an e-Invoice

If a Buyer needs an e-Invoice for a transaction, they must inform the Supplier and provide the necessary details. The steps involved are:

1. Confirmation: Supplier asks the Buyer if an e-Invoice is required.
2. Information: Buyer provides the required information to the Supplier.
3. Issuance: Supplier completes the necessary fields and issues the e-Invoice according to the guidelines.
4. Validation: The validated e-Invoice can be used by the Buyer as proof of expense for tax purposes.

To ease the process, the IRBM provides concessions for individuals in providing their Tax Identification Number (TIN) and identification details:

• Malaysian Individuals:
  • TIN
  • MyKad/MyTentera number
  • Both TIN and MyKad/MyTentera number
• Non-Malaysian Individuals:
  • TIN
  • Both TIN and passport number/MyPR/MyKAS number

If a non-Malaysian individual does not have a TIN, the Supplier may use a general TIN along with the individual's passport number/MyPR/MyKAS number.

In summary, individual Buyers need to provide specific details for the issuance of an e-Invoice.

Individual Buyer's details to be provided to Supplier

The individual Shipping Recipient must provide the following details for the issuance of the e-Invoice:

Individual Shipping Recipient’s details to be provided to Supplier

If the individual Buyer and/or individual Shipping Recipient (where applicable) provides either a Tax Identification Number (TIN) or a MyKad/MyTentera identification number (instead of both), the Supplier should include the following details for e-Invoice purposes:

1. Tax Identification Number (TIN): If provided, this number should be recorded as the primary identifier for the individual.
2. MyKad/MyTentera Identification Number: If provided, this number should be recorded as the primary identifier for the individual.

This ensures that the e-Invoice contains sufficient identification information to comply with regulatory requirements, even if only one of the identifiers is provided.

Details of TIN and identification number/ passport number to be included bySupplier for issuance of e-Invoice to individual Buyer / individual Shipping Recipient

Example 1:

Mr. Ahmad (Buyer) spent RM2,500 to buy a smartphone from Greta Solutions (Supplier) and has requested an e-Invoice to be issued.

Tech Solutions Sdn Bhd has requested Mr. Ahmad’s personal details to proceed with the issuance of the e-Invoice. Mr. Ahmad provided all the necessary details, including his MyKad identification number, except for his Tax Identification Number (TIN). Despite not having the TIN, Tech Solutions Sdn Bhd can still issue an e-Invoice to Mr. Ahmad.

Upon receiving the validated e-Invoice, Mr. Ahmad can use it as proof of expense for tax purposes.

The following image illustrates an example of a validated e-Invoice in PDF format issued by Tech Solutions Sdn Bhd to Mr. Ahmad.

Where the Buyer Does Not Require an e-Invoice

1. If the Buyer does not require an e-Invoice, the Supplier will issue a regular receipt to the Buyer, as per the current business practice. This receipt does not need to be submitted for IRBM’s validation since it is not an e-Invoice.
2. The Supplier can aggregate transactions with Buyers who do not require an e-Invoice on a monthly basis and submit a consolidated e-Invoice to IRBM within seven '7' calendar days after the month-end.
3. For consolidated e-Invoices, IRBM allows Suppliers to use one or a combination of the following methods:
   • Presenting the summary of each receipt as separate line items in the consolidated e-Invoice.
   • Listing the receipts (in a continuous receipt number sequence) as line items. If there is a break in the receipt number chain, the next sequence will be included as a new line item.
   • Branches or locations can submit consolidated e-Invoices using either of the above methods for receipts issued by those branches or locations.
4. To enhance the performance of the MyInvois System, the following limitations are set:
   • A maximum size of 5MB per submission.
   • A maximum of 100 e-Invoices per submission.
   • A maximum size of 300KB per e-Invoice.Suppliers can split receipts into several consolidated e-Invoices to adhere to these requirements.
5. Note that consolidation does not apply to self-billed e-Invoices, except in the following cases:
   • Acquisition of goods or services from individual taxpayers who are not conducting a business.
   • Interest payment to the public, regardless of whether they are businesses or individuals.

Example 2:

‍Hibiscus Mart Sdn Bhd (Hibiscus Mart) is a small retail business with branches in Penang and Kuala Lumpur. In October, Hibiscus Mart issued normal receipts and made the following sales without issuing

an e-Invoice:

• Penang branch: 500 transactions amounting to RM25,000
• Kuala Lumpur branch: 2,000 transactions amounting to RM65,000

Within seven calendar days after the end of October (i.e., by 7 November), Hibiscus Mart issues two separate consolidated e-Invoices. One e-Invoice is for the Penang branch and another for the Kuala Lumpur branch, each reflecting the total sales for the respective branch. Hibiscus Mart consolidates the sales by presenting each receipt number chain as separate line items. Additionally, all receipt reference numbers that contribute to the total sales are included in the “Description” field for the relevant branch.

Example of validated consolidated e-Invoice in PDF format(Kuala Lumpur branch)

Meanwhile, Cer-Mart Sdn Bhd, a competitor of Hibiscus Mart, has four branches located in the same area as Hibiscus Mart, as well as in Malacca and Ipoh. Cer-Mart issued a consolidated e-Invoice to record its sales for the month of October. The sales made by each branch in October (with no individual e-Invoices issued) are as follows:

• Penang branch: 2,500 transactions amounting to RM75,000
• Kuala Lumpur branch: 5,800 transactions amounting to RM125,000
• Malacca branch: 1,300 transactions amounting to RM22,000
• Ipoh branch: 1,850 transactions amounting to RM25,300

Unlike Hibiscus Mart, Cer-Mart Sdn Bhd decided to consolidate its sales revenue for each branch into separate consolidated e-Invoices, presenting each receipt as a single line item. Cer-Mart is required to include all receipt reference numbers that make up the total sales in the "Description" field.

If Buyers require an e-Invoice after receiving a receipt from the Supplier, they can request an e-Invoice within the month of the transaction. This timeframe allows the Supplier to include the receipt in the consolidated e-Invoice. Buyers are encouraged to request an e-Invoice as soon as possible after receiving the receipt to ensure timely processing. Suppliers should create and submit e-Invoices to IRBM for validation promptly to fulfill Buyers' requests.

Summary of Steps for Issuing a Consolidated e-Invoice When a Buyer Does Not Require One:

1. Supplier confirms with Buyers if an e-Invoice is required.
2. If Buyers confirm that no e-Invoice is needed, the Supplier issues a receipt as usual.
3. Within seven calendar days after the end of the month, the Supplier retrieves all receipt details from the previous month and issues a consolidated e-Invoice as proof of income.
4. The Supplier issues the consolidated e-Invoice accordingly.

The process of issuing a consolidated e-Invoice follows the same workflow as discussed in the e-Invoice Guideline, with these exceptions:

• Once the consolidated e-Invoice is validated, IRBM will notify only the Supplier (not the Buyer), as this e-Invoice is issued to the general public. Therefore, there will be no request for rejection from the Buyer.
• The validated e-Invoice serves as the Supplier's proof of income and does not need to be shared with the Buyer.

For the consolidated e-Invoice, the Supplier must complete the required fields, including the Buyer's details and certain transaction details using the appropriate information.

Example 3

Siti, Mei Ling, and Amir (Buyers) dined at Restaurant XYZ (Supplier) on 8 July, 17 July, and 21 July respectively. Since they did not request an e-Invoice, Restaurant XYZ issued standard receipts to them instead.

On 1 August 2025 (i.e., within seven calendar days after the month-end), Restaurant XYZ aggregates all receipts for the month of July and issues a consolidated e-Invoice, which is then transmitted to IRBM for validation.

Restaurant XYZ is not required to share the validated consolidated e-Invoice with its Buyers, as the consolidated e-Invoice is issued to the general public rather than specific Buyers. This serves as proof of income for Restaurant XYZ, and since its Buyers did not request any e-Invoice, they do not need to receive the consolidated e-Invoice. Below is an example of the consolidated e-Invoice in XML or JSON format issued by Restaurant XYZ via API.

Please note that the formats shown below are for illustration purposes only, and the actual formats are provided in the Software Development Kit (SDK).

Below is an example of the consolidated e-Invoice issued by Restaurant XYZ (in PDF format) after aggregating all issued receipts, which have been submitted to and validated by IRBM:

The above example is for illustration purposes only and is subject to change.

Example 4

Same facts as in Example 3. On 28 July 2025, Amir (Buyer) decided to request an e-Invoice for his meal (receipt number: 12442) on 21 July 2025.

Amir contacted Restaurant XYZ (Supplier) to inquire about converting his receipt to an e-Invoice. Since Restaurant XYZ provides a web portal/mobile application for this purpose, Amir visited the portal/application and provided his personal details to obtain the e-Invoice.

The request for the issuance of an e-Invoice should be made by Amir no later than 31 July 2025 (i.e., within the month of the transaction).

Example 5

Aisyah (Buyer) purchased badminton rackets and shuttlecocks from Sukan Sdn Bhd (Supplier) on 30 September 2025. She did not request an e-Invoice at check-out as she was running late for her class.

Swamped with errands and coursework, Aisyah forgot to request an e-Invoice from Sukan Sdn Bhd’s web portal on the same day of her purchase. She only requested an e-Invoice on 1 October 2025.

Since Aisyah did not request an e-Invoice within the month of the transaction (i.e., by 30 September 2025), Sukan Sdn Bhd may deny her request for the issuance of an e-Invoice based on the abovementioned guidance.

As Sukan Sdn Bhd had already issued the consolidated e-Invoice for receipts issued in September 2025, they rejected Aisyah’s request accordingly.

Certain Activities Requiring Individual e-Invoices for Each Transaction (i.e., consolidation of e-Invoice is not allowed)

For specific activities, taxpayers must issue an e-Invoice for each transaction with Buyers. Consolidated e-Invoices are not permitted for these activities. Taxpayers will need to collect the Buyer’s details for each e-Invoice issuance.

Currently, the industries and transactions where an e-Invoice is required for each transaction include the following:

IRBM recognizes the potential challenges in issuing e-Invoices to individual Buyers for the types of activities and transactions listed.

------------------------------------------------------------------------------------------------------

If you need more details, don't forget to subscribe to our newsletter. We'll update you with the continuation of this blog and more valuable insights.

In this blog, we've covered the essential aspects of Malaysia's e-Invoicing system, from understanding mandatory fields to handling transactions with Buyers and issuing consolidated e-Invoices. We hope this information has been helpful in guiding you through the e-Invoicing process.

Stay tuned for more updates and detailed guides on e-Invoicing and other relevant topics. Our upcoming posts will delve deeper into specific scenarios, provide more examples, and offer tips on optimizing your e-Invoicing practices to ensure compliance and efficiency.

Thank you for reading! Feel free to share this blog with your colleagues and peers who might benefit from this information. Your feedback and suggestions are always welcome, so don't hesitate to reach out to us.

Subscribe to our newsletter for the latest updates, expert advice, and exclusive content tailored to help you stay ahead in the world of digital invoicing. We look forward to keeping you informed and empowered!

Stay compliant, stay informed, and happy invoicing!