(Tax Update) E - Invoice Guidelines for Micro SME

Finance Minister II Datuk Seri Amir Hamzah Azizan recently outlined new e-invoicing regulations and support mechanisms during a parliamentary session.

Here are the key points:

E-Invoicing Requirement:

MSMEs with annual revenues less than RM150,000 are exempt from issuing e-invoices currently. However, all businesses, including small traders, are encouraged to adopt e-invoicing to align with Malaysia's digital business aspirations.

Support for MSMEs

The government recognizes the challenges MSMEs face, such as increased operational costs and the need for IT system upgrades. To mitigate these, MSMEs are allowed to issue consolidated e-invoices that summarize all sales transactions monthly.

MyInvois Portal

MSMEs can utilize the MyInvois portal for e-invoicing at no additional cost. This tool helps streamline the digital invoicing process.

Tax Incentives

Custom system developers or users of third-party solutions can benefit from accelerated capital allowance claims, reducing from four to three years for purchasing devices and software starting in the 2024 assessment year.

A tax deduction up to RM50,000 per assessment year is available from 2024 to 2027 for consultancy fees incurred in implementing e-invoicing.

Implementation Timeline

From 1 August 2024, companies with a turnover exceeding RM100 million are mandated to implement e-invoicing.

Businesses earning between RM25 million and RM100 million must adopt e-invoicing by 1 January 2025.

By 1 July 2025, all other businesses, including SMEs, hawkers, and traders, are required to start e-invoicing.

Finance Minister Amir emphasized that the government would adopt an "educate and correct" approach to support the transition and remains committed to assisting companies, including MSMEs, in moving to e-invoicing. This initiative aims to enhance business efficiency and align Malaysian businesses with global digital standards.

Our Key Takeaway

We welcome this initiative and are eagerly awaiting the official guidelines from the Inland Revenue Board (IRB) regarding this concession. Stay tuned for our upcoming update on the latest developments in e-invoicing.

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