{Tax Update} e-Invoice Guideline 2.0

Latest Development on e-Invoice

The Inland Revenue Board of Malaysia (IRB) has updated its electronic invoice (e-Invoice) guidelines. Version 2.0 of the e-Invoice Guideline and a new Specific Guideline on e-Invoicing were released on September 29, 2023. A full 116-page document providing further guidance on specific areas of e-invoicing.

Key Changes to e-Invoice Guideline (Version 1.0 to Version 2.0):

Exempted Individuals/Entities

All individuals and legal entities must comply with e-invoice requirements, except for government, Rulers, local authorities, statutory authorities and statutory bodies, consular officers and diplomatic officers and facilities provided by the government, government bodies and government facilities such as clinics, multipurpose halls, etc.

These persons and authorities do not need to issue e-invoices, but their suppliers must issue e-invoices.

Companies listed on the stock exchange will be exempted from issuing e-invoices for dividend payments.

Consolidated E-Invoices

Businesses dealing with consumers need not issue an e-invoice on every sale. They can provide normal invoices to the customers. Such businesses can issue a consolidated invoice for the particular month, and this has to be done within seven days after the month’s end.

Consumers who require an e-invoice can request an e-invoice within the month of the purchase.

Suppliers can issue consolidated e-invoices monthly for specific B2C transactions exempt from e-invoicing for end consumers.

Certain activities, like motor vehicle sales, flight tickets, luxury goods, and construction contractors, require mandatory e-invoices.

E-Invoice Treatment

Invoices issued by the person registered under the e-invoicing system has to be validated or rejected by the purchaser within 72 hours. Otherwise, the invoice becomes final. In the event of a dispute, the only way to reverse the transaction is to issue a credit note and another invoice for the revised amount.

E-invoice treatment varies for disbursements or reimbursements.

Self-billed e-invoices apply to foreign suppliers, payments to agents, dealers & distributors, dividend distribution, e-commerce transactions, and acquisitions from individual taxpayers.

Exemptions for employment income, pension, alimony, certain dividends, zakat, and scholarships.

Transmission Mechanisms

Two e-invoice transmission mechanisms: MyInvois Portal hosted by IRBM and Application Programming Interface (API).

API configuration to be included in the Software Development Kit (SDK) expected in Q4 2023.

Foreign Income

E-invoices are required for all foreign income received in Malaysia from outside the country, serving as proof of income and expenses for tax purposes.

Data Fields

51 data fields, with some concessions for individual buyers, must be completed to issue an e-invoice.

Validated e-invoices include IRBM Unique Identifier Number, validation date, time, link, and QR code.

Previous Updates on E-Invoicing

E-Invoicing Malaysia - Transition Challenges and Strategies https://www.ktp.com.my/blog/e-invoicing-malaysia-transition-challenges-and-strategies/17aug23

Are you ready for e-Invoicing https://www.ktp.com.my/blog/e-invoicing-malaysia-are-you-ready/10aug23
The coverage of e-Invoicing https://www.ktp.com.my/blog/e-invoicing-malaysia-coverage/3aug23
The timeline of e-Invoicing https://www.ktp.com.my/blog/e-invoicing-malaysia-timeline/2aug23
The workflow of e-Invoicing https://www.ktp.com.my/blog/e-invoicing-malaysia-the-workflow/31jul23

Source

IRB e-Invoice version 2.0 https://www.hasil.gov.my/media/nofmzbk1/irbm-e-invoice-guideline-version-20.pdf

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