E-Invoicing in Malaysia By August 2024

In Malaysia, the adoption of e-invoicing is set to revolutionize the way businesses handle transactions. E-Invoices are planned to replace traditional paper or electronic invoices, credit notes, and debit notes. This transition promises greater efficiency, accuracy, and transparency in financial operations.

What Is The e-Invoicing Definition in Malaysia?

The e-invoice is officially defined by the Malaysian authorities as a digital representation of a transaction between a supplier and a buyer. E-invoices must be created in the digital format specified by the IRBM (Inland Revenue Board of Malaysia) to be automatically processed by the relevant systems (XML or JSON formats).

An e-Invoice contains the same essential information as traditional documents: supplier and buyer details, item description, quantity, price excluding tax, tax, and total amount. It serves as a record of transaction data for daily business operations.

Importantly, the issuance of e-Invoices is not limited to domestic transactions but is also applicable for cross-border transactions.

Implementation Mechanisms and Timeline of E-invoicing in Malaysia

To facilitate the transition to e-invoicing, the Malaysian government has provided two transmission mechanisms:

1. MyInvois Portal: This is an official portal that offers a user-friendly platform for businesses to generate and manage e-Invoices.
2. Application Programming Interface (API): Businesses can integrate e-Invoicing directly into their existing systems through API integration.

All taxpayers are required to implement e-Invoicing, with implementation taking place in phases according to annual turnover or revenue thresholds. The implementation timeline is as follows:

• Taxpayers with annual turnover or revenue of more than RM100 million: Implementation by 1st August 2024.
• Taxpayers with annual turnover or revenue of more than RM25 million and up to RM100 million:  Implementation by 1st January 2025.
• All other taxpayers:  Implementation by 1st July 2025.

The annual turnover or revenue for e-Invoice implementation is determined as follows:

• For taxpayers with audited financial statements: Based on the annual turnover or revenue stated in the statement of comprehensive income in the audited financial statements for the financial year 2022.
• For taxpayers without audited financial statements: Based on annual revenue reported in the tax return for the year of assessment 2022.
• In case of a change of accounting year end for the financial year 2022, the turnover or revenue will be pro-rated to a 12-month period for determining the e-Invoice implementation date.

The rollout of e-Invoicing in Malaysia marks a significant step towards digital transformation in the business landscape. By streamlining processes, improving accuracy, and enabling real-time validation, e-Invoicing promises to enhance efficiency and transparency across various sectors.

Have a look at the official information about Malaysian e-invoicing.