Malaysia – e-invoicing FAQs released

The Inland Revenue Board of Malaysia (IRBM aka Lembaga Hasil Dalam Negeri) has published guidelines for the implementation of mandatory e-invoicing in Malaysia. As part of these guidelines, IRBM has published frequently asked questions in relation to Malaysian e-invoicing. While these FAQs are only available in the guidelines document, Avalara has reproduced them below for clarity.

By way of background, Malaysia will implement mandatory e-invoicing through a phased implementation starting with taxpayers that have an annual turnover or revenue of more than RM100 million (approximately 22 million USD) from June 1, 2024, and all taxpayers by 2027. It will be a Continuous Transaction Control (CTC) model with real-time validation of invoices by IRBM.

General

1.      Is e-Invoice applicable to transactions in Malaysia only?

No, e-Invoice is applicable to both local and international transactions. Further details on the treatment will be provided in a separate guideline.

 

2.      Will there be any engagement sessions with IRBM?

IRBM is actively conducting a series of engagement sessions with tax practitioners, professional bodies, and identified stakeholders to provide comprehensive information regarding the implementation of e-Invoice in Malaysia including: a. Sharing the planning of action plans, strategies, and status developments regarding the implementation of e-Invoice; and b. Obtaining feedback and views through two-way communication between IRBM and taxpayers on the implementation of e-Invoice.

 

3.      Who should we reach out to if there are queries or concerns?

Please raise any queries or concerns to myinvois@hasil.gov.my.  

 

4.      What e-Invoice model will be adopted?

IRBM will develop the Continuous Transaction Control (CTC) Model where the validation is done instantly (or near instantly) by IRBM.

 

5.      What does IRBM validate in the e-Invoice?

IRBM validation includes TIN and e-Invoice data structure/format. Further info can be found in the guideline under Section 2.4.1 Pre-Submission – e-Invoice Submission Requirements.

 

6.      How would IRBM monitor and audit the e-Invoice data security and privacy?

IRBM adopts a high standard in ensuring data security in managing data of taxpayers. Hence, similarly, high standards will be maintained through a security posture assessment to ensure configuration (code) and structure will be conducted before they go live.

 

7.      Is there a registration requirement for technology providers to participate in the implementation?

Not at this juncture. However, this may change in the future. Technology providers have the responsibility to ensure the functionality and reliability of their API integration with IRBM.

 

8.      Do technology providers need to apply for a certification in Malaysia in order to provide the CTC e-Invoice solution?

Not at this juncture. However, this may change in the future. Kindly refer to IRBM’s Official Portal for any latest updates on the latest position.

 

Functional

1.      Will all businesses be required to issue e-Invoice?

Yes, the mandatory implementation will be based on turnover or revenue thresholds and will be implemented in phases starting from June 1, 2024. The implementation details are as follows:

PhaseDateTargeted Taxpayers  
1June 1, 2024Annual turnover or revenue of more than RM100 million  
2January 1, 2025Annual turnover or revenue of RM50 million up to RM100 million  
January 1, 2026Annual turnover or revenue of RM25 million up to RM50 million  
4January 1, 2026All taxpayers and certain non-business transactions   

 

Notwithstanding the above mandatory implementation timeline, taxpayers are welcome to implement e-Invoice at an earlier phase voluntarily.

 

1.      Does the MyInvois Portal allow for e-Invoice to be created and stored in draft form prior to finalisation and issuance?

Yes, the supplier will be able to create e-Invoice in draft mode. e-Invoice data and validation will only be captured based on the final submitted e-Invoice.

 

2.      Is there any adjustment window allowed to the supplier to cancel an invoice submitted to IRBM?

Yes, there is a 72-hour timeframe for the e-Invoice to be cancelled by the supplier. Please refer to section 2.4.6 Step 5 and 6 – Rejection and Cancellation for more information

 

3.      Does the MyInvois Portal allow for editing of information after the e-Invoice has been verified by IRBM?

No, the supplier would need to cancel the e-Invoice and reissue a new e-Invoice.

 

4.      Will the supplier’s invoice serial number still remain or will this be assigned by IRBM once validated e-Invoice is returned to supplier?

The supplier will receive a cleared e-Invoice with a Unique Identifier Number assigned by IRBM upon validation. The supplier’s invoice serial number will remain as a separate field in the same invoice document.

 

5.      Is an e-Invoice required for disbursements and reimbursements?

Disbursements and reimbursements are currently under deliberation and the guidance with specific details and requirements addressing such processes will be issued in due course.

 

Technical

1.      Does the API solution offer security and encryption services to prevent businesses from misusing the invoicing data?

Yes, through the necessary Network & Security monitoring tools to ensure data security and privacy.

 

2.      Will IRBM provide any technical guidance on system integration?

Yes, a Software Development Kit (SDK) will be provided to facilitate system integration. Any additional requirements will be updated in future versions of the SDK.

 

3.      Is there any specific application required to scan the QR code?

The QR code will only contain a link to the validated e-Invoice. Hence, any device (e.g., mobile camera, QR code scanner application) capable of scanning a QR code will be able to scan the QR code.

 

At Avalara, we make e-invoicing compliance simple. Avalara E-Invoicing and Live Reporting is a solution designed to comply with regulations in over 60 countries and we’ve got the future covered too. Our cloud-based solution is flexible, scalable, and allows you to quickly respond to new requirements. Avalara is a Certified Peppol Service Provider and is an accredited Peppol access point in Australia, New Zealand, and Japan. 

Contact us to discuss how Avalara can help you meet e-invoicing requirements globally.

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