e-Invoicing implementation in Malaysia for certain taxpayers is on 1 June 2024 and will be mandatory for all businesses in Malaysia from 1 January 2027.
What is e-invoice?
Introduced and will be implemented by Malaysian Inland Revenue Board (IRB)
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
Replaces paper or electronic documents such as invoices, credit notes and debit notes
How does the e-invoice work?
Taxpayers to transmit e-invoices to IRB using the suitable mechanism as follows;
- For SMEs, which do not have Application Programming Interface (API), IRB will provide a free web-based portal which requires manual input of data into the system.
- For large taxpayers or businesses that have high-volume transactions, to develop their own API which requires upfront investment in technology and adjustments to their existing systems.
The e-invoice will then be submitted to IRB’s central platform for real-time verification via the proposed Continuous Transaction Controls (CTC) Clearance model.
Upon verification, the CTC model will issue a URL Link containing a QR code to the supplier containing the information on the e-invoice.
The supplier then has to print the QR code on the invoice before they send the e-invoice to the buyer.
The IRB foresees that the CTC model verification process will be seamless and done in real-time.
For SMEs, which do not have Application Programming Interface (API), IRB will provide free web-based solutions which require manual input of data into the system.
Purpose
To digitalise tax administration on transactions between a supplier and a buyer
To increase tax compliance
Implementation date
Implementation of the e-invoice is slated to commence in June 2024 for certain targeted taxpayers and for all taxpayers including certain non-business transactions on 1 January 2027 as follows;
Taxpayers with annual revenue of: | Implementation date |
|---|---|
More than RM100 million | 1 June 2024 |
More than RM50 million and up to RM100 million | 1 January 2025 |
More than RM25 million and up to RM50 million | 1 January 2026 |
All taxpayers and certain non-business transactions | 1 January 2027 |
All information contained herein is summarised based on the information provided in the Malaysian IRB's website updated on 31 July 2023 and it is intended to provide a general overview of the subject matter and should not be regarded as a basis for tax advise for specific circumstances or as a a basis for formulating business decisions. No responsibility for loss to any person acting or refraining from acting as a result of any material in this publication can be accepted by GSK & Associates. Readers should not act on the basis of this publication without seeking professional advice.
Should you require further clarification, please do not hesitate to contact our Partner Mr Gunalan Appalasamy at 03-2705 6630 or email to gunalan@gskassociates.net or Managers whom you are accustomed to dealing with.