Imagine you’re operating a successful business in Malaysia, providing top-notch services and products to clients. Everything is going great until the new e-invoicing mandate by the Inland Revenue Board of Malaysia (IRBM) comes into action. Suddenly, your existing invoicing process is insufficient, causing compliance issues and operational disruptions.
You might question if there’s a solution that ensures compliance with LHDN regulations while simplifying your invoicing process.
That’s where Complyance malaysia steps in, transforming this challenge into a seamless experience. Complyance offers comprehensive e-invoicing solutions designed to meet all IRBM requirements, ensuring your business remains compliant and efficient.
No longer do you have to contend with manual invoicing processes. With Complyance, you can effortlessly integrate e-invoicing into your business operations, enhancing efficiency and compliance.
Their user-friendly platform is designed to expedite the invoicing process, ensuring seamless compliance with all regulatory requirements. By partnering with Complyance, businesses can focus on growth with confidence, knowing that the complexities of compliance are deftly managed.
Complyance and its partners are actively collaborating with LHDN to implement cutting-edge e-invoicing solutions.
Furthermore, Complyance is recognized by regulatory bodies worldwide for its efforts in optimizing e-invoicing solutions to comply with global standards.
Complyance Solutions simplifies the e-invoicing process, assuring seamless integration with existing systems. Following the Inland Revenue Board of Malaysia’s ("IRBM") announcement in May 2023 on the implementation of e-Invoicing in 2024, the IRBM has on 6 April 2024 issued updated e-Invoice Guidelines (Version 2.3), Specific Guidelines (Version 2.1), and SDK (Version 1.0) on their website.
The implementation of e-Invoicing is intended to support Malaysia’s digital economy development and to enhance the efficiency of Malaysia’s tax administration. e-Invoices will supplant the traditional paper-based invoices which will enhance the efficiency in recording financial transactions and facilitate real-time data collection.
To support the development of the digital economy, the Government shall implement e-Invoice in stages, in an effort to enhance the efficiency of Malaysia’s tax administration management.
An e-Invoice is a digital record of a transaction between a supplier and a buyer. It eliminates the necessity for paper invoices by enabling businesses to generate and store machine-readable, digitized versions of invoices, facilitating streamlined processes for invoicing and payments. e-Invoices will be created in IRBM’s specified format (XML, JSON) and shall contain 55 fields (37 mandatory).
The e-Invoicing implementation in Malaysia will start on 1st August 2024, initially applicable to taxpayers with an annual turnover or revenue exceeding RM100 million. Starting from 1st January 2025, the system will extend to taxpayers with annual turnovers or revenues extending from more than RM25 million to RM100 million. Finally, by 1st July 2025, e-Invoicing will become mandatory for all taxpayers in Malaysia, regardless of their annual turnover or revenue.
In summary:
e-Invoicing applies to all taxpayers undertaking commercial activities in Malaysia. It will facilitate immediate validation and storage of Business-to-Business (“B2B”), Business-to-Consumer (“B2C”) and Business-to-Government (“B2G”) transactions. It will also apply to certain non-business transactions between individuals.
For certain B2C transactions where the end consumer does not need e-Invoices to support the transactions for tax purposes, suppliers are allowed to issue conventional receipts/invoices based on current practices.
Below is an overview of the process for Buyers who do and don’t require e-Invoices.
All individuals and legal entities are required to comply with the e-Invoicing requirement, including:
Issued whenever a sale or other transaction takes place to recognize the income of taxpayers.
Purchases made or other expenditure by taxpayers, including returns and discounts. It can also be used to correct or subtract an income receipt in terms of the quantities documented. In certain circumstances, taxpayers may need to issue a self e-Invoice to document an expense such as foreign transactions.
Two distinct e-Invoice transmission mechanisms are available:
Our team will assess and evaluate current invoicing procedures, process workflow (including internal controls) and related system mechanisms to identify changes/improvements required. We will conduct reviews on revenue-related transaction streams and Tax implication to recommend necessary adjustments whilst assessing potential limitations and identification of gaps
noted from the analysis. We will also review Standard Operating Procedure (SOP) for e-invoice issuance as well as provide Cybersecurity advisory/recommendation in relation to e-invoice architecture.
We will manage the implementation of e-invoicing together with your accounting software service provider (e.g. Oracle, SAP, MS, etc.) to be compliant to the IRBM’s requirements and ensure that the implementation is in accordance with a defined scope and timeline.
We will evaluate the readiness of the new system to comply with IRBM’s requirements as follows:
Complyance Middleware is software that functions as a bridge between your ERP/business system and IRBM's MyInvois System. The complexity of enhancing your ERP/business system will be reduced to just exporting data to Middleware, which will manage and process e-invoices on your behalf. It will take care of future enhancements to keep up with evolving IRBM requirements, decreasing the cost of compliance over time.
Explore more on how our e-Invoicing middleware can assist your business here!
