E-Invoicing Malaysia - Are You Ready?

E-Invoicing Malaysia - Are You Ready?

Introduction

An e-Invoice is a digital representation of a transaction between a supplier and a buyer. e-Invoice replaces paper or electronic documents such as invoices, credit notes, and debit notes.

An e-Invoice contains the same essential information as a traditional document, for example, supplier’s and buyer’s details, item description, quantity, price excluding tax, tax, and total amount, which records transaction data for daily business operations.

Is e-invoicing mandatory in Malaysia?

Malaysia will introduce a countrywide e-invoicing mandate in June 2024.

The Malaysian government plans to introduce a Centralized Pre-Clearance CTC model on all transactions to increase efficiency and strengthen the tax administration. A gradual introduction of the obligation will commence in June 2024 and end in 2027.

Assess The Readiness of E-Invoice as per IRB Guide

To ensure that businesses are ready for the implementation of e-Invoice in the upcoming months, here are a few key steps that can be carried out to assess readiness and standardisation:

1. Allocate and equip personnel with the necessary capabilities to adopt and oversee the implementation of e-Invoice;

2. Determine the availability of data sources and structure, current IT capabilities to support system readiness and processes to comply with e-Invoice requirements and obligations; and

3. Review current processes in issuing transaction documents (i.e., invoice, debit note, credit note, refund note).

Our Take for Getting Ready E-Invoicing

Here's a point-form guide to help you :

  1. Understand Legal Requirements

    Research and comply with local e-invoicing regulations and tax laws.

  2. Choose and Set Up an E-Invoicing Platform:

    Select compliant software, integrate with existing systems, and migrate data.

  3. Design and Implement Security Measures:

    Customize invoice templates, secure data transmission, and control access.

  4. Train Staff and Communicate with Stakeholders:

    Educate employees on e-invoicing and notify customers/suppliers.

  5. Automate Processes and Test System:

    Set up automation for generation and tracking, and test for functionality.

  6. Monitor, Maintain, and Record Keeping:

    Regularly review and update the system, and keep electronic copies as required.

  7. Consult Professionals if Needed:

    Engage experts in compliance with local laws.

Previous Updates on E-Invoicing

  • The workflow of e-Invoicing https://www.ktp.com.my/blog/e-invoicing-malaysia-the-workflow/31jul23

  • The timeline of e-Invoicing https://www.ktp.com.my/blog/e-invoicing-malaysia-timeline/2aug23

  • The coverage of e-Invoicing https://www.ktp.com.my/blog/e-invoicing-malaysia-coverage/3aug23

Source

IRB E-Invoicing Guide version 1.0 https://www.hasil.gov.my/en/e-invoice/

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