Malaysia’s Inland Revenue Board (IRBM) has published updated Guidance and FAQs on 19 July, 2024, regarding its upcoming B2B e-Invoicing system.
This follows after IRBM released updates regarding electronic invoicing (e-invoicing) on 28 June, 2024. These include revised versions of the e-invoice guideline (version 3.0) and the e-invoice specific guideline (version 2.2).
The e-invoicing system will function under a Continuous Transaction Control (CTC) model, which needs to be pre-authorised from the IRBM prior to sending invoices to customers. The e-Invoices must be generated in the form of XML or JSON file format, in accordance with the requirements outlined by the IRBM as well the Inland Revenue’s e-Invoice Software Development Kit microsite.
IRBM has provided two (2) e-Invoice transmission mechanisms:
- Through the MyInvois Portal provided by IRBM; and
- Application Programming Interface (API).
Taxpayers may use either or both transmission mechanisms to transmit e-Invoices, as long as there is no duplication of e-Invoices.
The effective launch of the e-Invoicing system has been confirmed, it will start on 1 August, 2024, for taxpayers with an annual turnover over MYR 100 million and on 1 January 2025 for taxpayers with annual turnovers ranging from MYR 25 million to MYR 100 million. For all other taxpayers, the e-Invoicing system will apply from 1 July, 2025.
There is no specific requirement on the timing of e-Invoice issuance, except in specific cases such as consolidated e-Invoice, self-billed e-Invoice for importation of goods/services and e-Invoice for foreign income.
For consolidated e-Invoice, suppliers are required to issue the consolidated e-Invoice within seven (7) calendar days after the month end.
For self-billed e-Invoice for importation of goods, the Malaysian purchasers are required to issue self-billed e-Invoice latest by the end of the month following the month of customs clearance.
For self-billed e-Invoice for importation of services, the Malaysian purchasers are required to issue self-billed e-Invoice latest by the end of the month following the month upon (1) payment made by the Malaysian purchaser; or (2) receipt of invoice from foreign supplier, whichever earlier.
For e-Invoice for foreign income, the suppliers (i.e., income recipients) are required to issue the e-Invoice latest by the end of the month following the month of receipt of the said foreign income.
The supplier is allowed to issue consolidated e-Invoice for transactions where no request for e-Invoice has been made by the buyer, regardless of business-to-business (B2B), business-to-consumer (B2G) or business-to-government (B2G) transactions, except for transactions / activities listed under Section 3.7 of the e-Invoice Specific Guideline. 26.
Failure to issue e-Invoice is an offence under Section 120(1)(d) of the Income Tax Act 1967 and will result in a fine of not less than MYR 200 and not more than MYR 20,000 or imprisonment not exceeding six months or both, for each non-compliance.
