Implementation of e-invoicing

The Inland Revenue Board (“IRB”) has recently issued the e-Invoice Guideline 2023 to clarify the scope of the e-invoice implementation, as well as to address common questions and concerns that taxpayers may have following the earlier announcement of the implementation of the e-Invoicing initiative.

Definition and Overview

An e-Invoice is a digital representation of a transaction between a supplier and a buyer, which replaces paper or electronic documents such as invoices, credit notes and debit notes. It is a file created in a format specified by the IRB that can be automatically processed by relevant systems. It is not an invoice in PDF or Word formats, nor an image of the invoice.

e-Invoicing applies to all taxpayers undertaking commercial activities in Malaysia, including business-to-business (“B2B”), business-to-consumer (“B2C”), and business-to-government (“B2G”) transactions. However, for certain B2C transactions where end consumers do not require e-Invoices to support the said transactions for tax purposes, the supplier is allowed to issue invoices as per current practice. After a certain period suppliers will be required to aggregate these invoices issued and issue a consolidated e-invoice.

Implementation timeline

Please see below the e-Invoice implementation timeline:-

Transmission mechanisms

To facilitate taxpayer’s transition to e-invoice, the IRB has developed two distinct e-invoice transmission mechanisms:

A portal (MyInvois Portal) hosted by IRB that enables the individual generation through a comprehensive form and the option for batch generation through spreadsheet upload for processing multiple transactions; and
An Application Programming Interface (“API”) that enables businesses to conveniently transmit a high-volume of transactions.

Taxpayers can select the most suitable mechanism to transmit e-invoices to the IRB, based on their specific needs and business requirements.

Assessing readiness for e-Invoicing

To ensure that businesses are ready for the implementation of e-invoicing, below are a few key steps that can be carried out to assess the readiness and standardisation:

Allocate and equip personnel with the necessary capabilities to adopt and oversee the implementation of e-invoicing;
Determine the availability of data sources and structure, current IT capacities to support system readiness and processes to comply to e-invoice requirements and obligations; and
Review current processes in issuing transaction documents (i.e. invoice, debit note, credit note, refund).