(Tax Update) E-Invoicing : Grace Period for 6 Months

The Inland Revenue Board (IRB) has announced significant concessions on e-invoicing, providing much-needed relief and flexibility to taxpayers. Based on a recent press conference by Hasil, here are the key points:

Key Concessions

Consolidated E-Invoicing Allowed

All industries and activities can issue consolidated e-invoices, including self-billed e-invoices. In other words, consolidated e-invoice can be in importation of goods and services, payments to agents, dealers and distributors.

Sellers are permitted to issue consolidated e-invoices even if buyers request individual e-invoices for each transaction.

Flexible Product and Service Descriptions

Any type of description can be entered in the "description of product or service" data field, offering more flexibility in invoicing details.

Grace Period for Compliance

There will be no prosecution for non-compliance with e-invoicing rules under Section 120 of the Income Tax Act 1967 from August 2024 to January 2025, provided taxpayers comply with the consolidated e-invoicing requirements.

Implications for Taxpayers

These concessions offer substantial breathing room for businesses to transition to e-invoicing smoothly and with minimal disruption. By allowing consolidated e-invoicing and flexible descriptions, the IRB is reducing the immediate administrative burden on businesses, making the initial adoption phase more manageable.

Incentives for Early Compliance

To encourage timely adoption, taxpayers who implement e-invoicing as per the August 2024 timeline, without relying on the concessions, will be eligible for accelerated capital allowance. This benefit reduces the claim period from three years to two years for the Years of Assessment 2024 and 2025, applicable to capital expenditure on ICT equipment and software related to e-invoicing.

Government Support and Commitment

These measures reflect the government’s responsiveness to taxpayer concerns and its commitment to supporting the transition to more efficient tax governance. The relaxation of rules and the introduction of incentives highlight the government’s proactive approach in facilitating a smoother e-invoicing implementation process.

Stay informed and take advantage of these concessions to ensure a seamless transition to e-invoicing while maximizing potential benefits for your business.

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