Overview of e-Invoicing in Malaysia

To support the growth of the digital economy, Malaysia will implement e-Invoice in stages in an effort to enhance the efficiency of Malaysia’s tax administration management. The focus is on strengthening the digital services infrastructure and digitalising the tax administration. The e-Invoice will enable near real-time validation and storage of transactions, catering to Business-to-Business (B2B), Business-to-Consumer (B2C) and Business-to-Government (B2G) transactions.

e-Invoice Workflow

Step 1 Issuance of e-Invoice
When a sale or transaction is made, supplier creates and e-Invoice and shares it to IRBM via MyInvoice Portal or API for validation.
Step 2 Validation of e-Invoice
IRBM validation is performed in near real-time, ensuring that the e-Invoice meets the necessary standars and criteria.
Once validated, the supplier will receive a Unique Identifier Number from IRBM via MyInvoice Portal or API. The Unique Identifier Number will allow traceability by IRBM and will reduce instances of tamperig with the e-Invoice.
Step 3 Notification of Validation of e-Invoice
IRBM will inform both the supplier and buyer once e-Invoice has been validated via MyInvoice Portal or API.
Step 4 Sharing of e-Invoice
Upon validation, the supplier is obliged to share the validated e-Invoice (embedded with a QR code) with the buyer. The QR code can be used to validate the existence and status of the e-Invoice via MyInvoice Portal.
Step 5 Rejection or Cancellation of e-Invoice
Upon issuance of e-Invoice, a stipulated period of time is given to:-
- Buyer to request for rejection of the e-Invoice
- Supplier to perform cancellation of e-Invoice

Rejection request or cancellation must be accompanied by justifications.
Step 6 MyInvoice Portal
Supplier and buyer will be able to obtain a summary of the e-Invoice transactions via MyInvoice Portal.

2 Key Scenarios Upon Implementation of e-Invoice

Scenario 1: Buyer requires an e-Invoice

Upon receiving the request from the Buyer for an e-Invoice, Supplier obtains the Buyer’s details required for the issuance of e-Invoice. The validated e-Invoice can be used as the Buyer’s proof of expense, to substantiate a particular transaction for tax purposes.

 
Scenario 2: Buyer does not require an e-Invoice

If the buyer does not need an e-invoice, the supplier will issue a normal receipt to the Buyer (same as current business practice). Such receipt would not be required to be submitted for IRBM’s validation as this document is not e-Invoice. Supplier will submit a consolidated e-Invoice to IRBM, within seven (7) calendar days after the month end.

 

Who Are Exempted from Issuing e-Invoice 

  • Ruler and Ruling Chief 1
  • Former Ruler and Ruling Chief 2
  • Consort of a Ruler of a State having the title of Raja Perempuan, Sultanah, Tengku Ampuan, Raja Permaisuri, Tengku Permaisuri or Permaisuri
  • Consort of a Former Ruler of a State previously having the title of Raja Perempuan, Sultanah, Tengku Ampuan, Raja Permaisuri, Tengku Permaisuri or Permaisuri
  • Government
  • State government and state authority
  • Government authority
  • Local authority
  • Statutory authority and statutory body
  • Facilities provided by the above government, authority or body (e.g., hospital, clinic, multipurpose hall, etc.)
  • Consular offices and diplomatic officers, consular officers andconsular employees
  • Individual who is not conducting business
  • Business taxpayer with an annual turnover or revenue of less than RM150,000

Which Income/ Expenses Does Not Require e-Invoice

The IRBM acknowledged there are various challenges in issuing e-Invoices for certain types of income or expense. To ease the adoption of e-Invoice, an e-Invoice (including self-billed e-Invoice) is not required for the following:

  • Employment income
  • Pension
  • Alimony
  • Distribution of dividend in specific circumstances
  • Zakat
  • Contract value for the buying or selling of securities or derivatives traded on a stock exchange or derivatives exchange in Malaysia or elsewhere.
  • Disposal of shares of a company incorporated in or outside Malaysia and not listed on the stock exchange, except where the disposer is a company, limited liability partnership, trust body or co-operative society.