E-Invoicing in Malaysia

The Government of Malaysia is going to implement e-Invoicing in Malaysia, with all taxpayer expected to come on board by 1 July 2025. The Inland Revenue Board (IRB) released the first version of the software development kit (SDK) as well as updates to both the e-Invoice Guidelines and e-Invoice Specific Guidelines on 9 February 2024. Here are the key summary of updates:

1. The list of parties exempted from implementing e-invoice expanded to include individual who is not conducting business.
   
   
2. A general tax identification number (TIN) can be used with respect to e-invoice involving government, state government and state authority, government authority, local authority and facilities provided by government e.g. hospital, clinic, multipurpose hall etc.
   
   
3. The supplier is responsible to ensure the accuracy of the information included in the e-invoice submitted to the IRB for validation.
   
   
4. The IRB allows the following consolidation methods for e-invoice:
   • Summary of each receipt presented as separate line items
   • The list of receipts (in a continuous receipt number) is presented as line items (i.e. where there is a break of the receipt number chain, the next chain shall be included as a new line item)
   • Each branch or location adopting either one of the methods above for the receipts issued by the said branch or location.
     
     
5. If there is no IRB TIN assigned to a non-Malaysian individual, a general TIN can be applied.
   
   
6. With respect to employee benefits or payments on behalf by employee, the employee can either request e-invoice to be issued in the name of employer, in the name of employee or just rely on the existing document format issued by the supplier to support the claim.
   
   
7. New categories requiring self-billed e-invoice:
   • Payment / credit to taxpayers recorded in statement / bill issued on a periodic basis (e.g. rebate)
   • Interest payment
     
     
8. Supplier MSIC code and business description are now required for self-billed e-invoice.
   
   
9. Self-billed e-invoice to agents, dealers and distributors are now expanded to cover payments in both monetary form or otherwise.
   
   
10. Self-billed e-invoice should be issued upon customs clearance for importation of goods.
    
    
11. Self-billed e-invoice should be issued upon payment made or receipt of invoice from foreign supplier for importation of services, whichever is earlier.
    
    
12. E-invoice in foreign currency can be submitted in either of the following:
    • e-invoice in foreign currency and appliable forex rate without RM equivalent
    • e-invoice in foreign currency and applicable RM equivalent without forex rate; or
    • e-invoice in foreign currency, applicable RM equivalent and applicable forex rate.
      
      
13. There is also detailed section on e-commerce transactions. E-commerce platform providers are responsible for the issuance of the following:
    • e-invoice (upon purchaser’s request); or
    • receipt (if no e-invoice is requested) to the purchase.
      
      
14. There are now 55 fields as compared to the previous 51 fields with respect to e-invoice.
    
    
15. The consolidation of e-invoice does not apply to self-billed e-invoice.

From the SDK, there are also certain important points to note as below:

1. Following the rejection of invoice by the buyer within the 72 hours timeframe, if the supplier does not “cancel” the transaction, it will still remain as valid status in the system.
   
   
2. Documents / information can be retrieved within a 30 days time window with a count of up to 10,000 documents. Various optional filters can be applied to get the desired document results.

The overview of the requirement is summarised in the document below for easy reference, covering a range of topics including the mechanism, the coverage, the fines, the timeline, the fields etc.