e-Invoicing for Expenses Incurred by Employee

Employment Benefits

An individual under a contract of service (i.e., employment) may be provided with employee benefits by his / her employer. Employee benefits may include benefits in cash or in kind that are received by an employee from the employer or third parties in respect of having or exercising the employment, such as:

• Employees’ pecuniary liabilities (e.g., utility bills, parking fees, and car maintenance charges)
• Clubmembership
• Gym membership
• Professional subscriptions
• Allowances (e.g., travelling allowance, petrol allowance or toll rate, parking rate / allowance, meal allowance)

Expenses Incurred by Employee on Behalf of Employer

An employee may incur certain expenses on behalf of the employer. Such expenses include, but not limited to, accommodation, toll, mileage, parking, telecommunication expenses and expenses incurred in a foreign country.

How to e-Invoice ?

Currently, employees are required to submit their expense claims to their employers by proving the authenticity of such expense with supporting documents (e.g., bills, receipts, invoices, statements, payment slips, etc.). Upon implementation of e-Invoice, when a sale or transaction is concluded, employees are required to request for the e-Invoices to be issued to their employer for proof of expense, to the extent possible. However, IRBM acknowledges that there may be difficulties in getting the e-Invoice to be issued in the name of the employer (as Buyer) for certain expenses. In this regard, the IRBM provides the following concession:

• Businesses will be allowed to proceed with the use of e-Invoice issued in the name of the employee or existing supporting documentation to support the particular transactions as proof of expense for tax purposes.
• In the event where employees paid for expenses incurred overseas, both employer and employee are not required to issue a self-billed e-Invoice. As such, IRBM will accept the foreign bills / receipts / invoices or existing supporting documentation as a proof of expense.

Note:

• For employment benefits, this exception it will only be applicable if the perquisites and benefits are clearly stated in the employer’s policy.
• For expenses incurred by employee on behalf of employer, this exception for will only be applicable if the employer is able to prove that the employee is acting on the employer’s behalf in incurring the expenses.