Malaysia E-Invoicing
Mandatory E-Invoicing for 4,000 Businesses with RM 100 Million Turnover
IRB targets 4,000 businesses by August 2024 for mandatory adoption of e-Invoicing by Malaysia LHDN for annual turnover of RM 100 million! By 1 July 2025, e-Invoicing will become obligatory for all businesses, irrespective of their sales threshold.
Why Need E-Invoicing System?
The e-Invoicing system is a significant step forward for the Malaysian government’s digitalization agenda. It is expected to have a positive impact on the economy and help to improve the efficiency of the tax system. The e-Invoicing system is designed to improve the efficiency and transparency of the invoicing process. It will also help to reduce tax evasion and fraud.
What is E-Invoicing?
E-Invoicing is not a human-readable PDF invoice. It is a machine-readable format. Malaysia LHDN e-Invoicing only accepts machine-readable XML, JSON files, not PDF, DOC, JPEG, or email.
Every invoice must be sent to LHDN for approval and validation by the Inland Revenue Board (IRB) before it can be printed as a verified invoice for your customer. IRBM will validation includes TIN and e-Invoice data structures / format. Upon validation of the e-Invoice, the supplier is obliged to share the cleared e-Invoice with the buyer after embedding the validated link (provided by IRBM) in a form of QR code on the e-Invoice. The QR code can be used to validate the existence and status of the e-Invoice via MyInvois Portal.
Why E-Invoicing?
Reduce manual efforts and human errors
Facilitate efficient tax filing
Streamline operational efficiency
Digitalize tax and financial reporting
How Long Does E-Invoicing Validation Take?
E-Invoicing is not a human-readable PDF invoice. It is a machine-readable format. Malaysia LHDN e-Invoicing only accepts machine-readable XML, JSON files, not PDF, DOC, JPEG, or email.
E-Invoicing Implement Timeline
E-Invoice will be implemented in phases to ensure the smooth transition. The roll-out of e-Invoice has been planned with careful consideration, taking into account the turnover or revenue thresholds, to provide taxpayers with sufficient time to prepare and adapt to the e-Invoice implementation.
Below show e-Invoice implementation timeline:
Days
Hours
Minutes
Seconds
Phase 1
Taxpayers with an annual turnover or revenue of more than RM100 million.
1 August 2024
1 January 2025
Phase 2
Taxpayers with an annual turnover or revenue of more than RM25 million and up to RM100 million.
Phase 3
All taxpayers and some non-business transactions.
1 July 2025
Who Required To Implement E-Invoicing?
Every invoice issued must include the following information, which will be stored in the IRBM Database. This information is required to ensure the authenticity, integrity, and traceability of e-Invoices. It possible also used by the tax authorities to verify the accuracy of tax returns.
