Cross-border transaction involves a transaction between a Malaysian buyer and a foreign supplier and vice versa. Foreign supplier refers to any supplier operating outside of Malaysia / not established in Malaysia, including non-Malaysian individual. Conversely, foreign buyer refers to any foreign person whom acquires goods and/or services from Malaysia.
Cross-border transactions consists of the following:
- Goods sold or services rendered by Foreign Seller (Supplier) to Malaysian Purchaser (Buyer)
- Goods sold or services rendered by Malaysian Seller (Supplier) to Foreign Purchaser (Buyer).
Goods sold or services rendered by Foreign Seller to Malaysian Purchaser
Currently, Foreign Seller would issue an invoice / bill / receipt to the Malaysian Purchaser to record the transaction e.g., sale of goods or provision of services. The invoice / bill / receipt would be issued in accordance with the Foreign Seller local invoicing requirements as part of their business practices. Given that the Foreign Seller is not mandated to implement Malaysia’s e-Invoice, the Malaysian Purchaser is required to issue a self-billed e-Invoice to document the said expense. A self-billed e-Invoice is required to support the said transaction for tax purposes.
The validated self-billed e-Invoice will serve as proof of expense for Malaysian Purchaser. The Malaysian Purchaser is not obliged to share the self-billed e-Invoice with the Foreign Seller. Kindly note that for the purposes of self-billed e-Invoice, where service tax on imported taxable service is applicable in accordance with the relevant SST legislation, taxpayer is required to include the service tax amount in the said self-billed e-Invoice.
- For importation of goods, the Malaysian Purchaser should issue a self-billed e-Invoice latest by the end of the month following the month of customs clearance is obtained.
- For importation of services, self-billed e-Invoice should be issued latest by the end of the month following the month upon payment made by the Malaysian Purchaser or receipt of invoice from foreign supplier, whichever earlier.
Goods sold or services rendered by Malaysian Seller to Foreign Purchaser
Currently, Malaysian Seller would issue an invoice / bill / receipt to the Foreign Purchaser to record the transaction e.g., sale of goods or provision of services. Upon the implementation of e-Invoice, Malaysian Seller is required to issue an e-Invoice to the Foreign Purchaser to record the said income.
Once the e-Invoice has been validated, IRBM will send notification to the Malaysian Seller only (i.e., no notification to be sent to Foreign Purchaser as they are not using MyInvois System). The validated e-Invoice will serve as proof of income for Malaysian Seller. The Malaysian Seller may share a copy of the visual representation of the validated e-Invoice to the Foreign Purchaser as a business-as-usual practice for record purposes.As Foreign Purchaser is not part of MyInvois System, there would not be any request for rejection from Foreign Purchaser. Should there be any error on the validated e-Invoice, any adjustment should be made by issuance of credit note / debit note / refund note e-Invoice by the Malaysian Seller.
What if certain required details for e-invoice are not available
Malaysian Purchaser/ Seller to input “NA” in the e-Invoice if:-
- The details are not applicable to the Foreign Seller / Purchaser
- The details are not provided by Foreign Seller / Purchaser;