Here at the forefront of financial and regulatory changes, we strive to keep you informed about the latest developments in e-invoicing. This comprehensive e-invoice FAQ guide addresses your most pressing questions, ensuring you have the most current information at your fingertips to make informed decisions for your SME business.
NOTE: Please be aware that our responses reflect the latest available data and may be subject to change as new updates emerge.
E-invoice Implementation and Compliance Timeline
- What is the implementation timeline for e-invoice?
For companies with an annual turnover of RM100 million and above: 1 August 2024.
For companies with an annual turnover between RM25-100 million: 1 January 2025.
For all companies: 1 July 2025.
- How is my company’s annual turnover determined?
It is determined via your audited financial statement for the year ending 2022 or your tax return for the year of assessment 2022.
- What are the penalties for non-compliance with e-invoice regulations?
Penalties for non-compliance with e-invoice regulations will be specified in future guidelines. Currently, issuing e-invoices should keep you compliant.
4. What are the key elements to adopt e-invoicing smoothly?
We recommend focusing your efforts on process/SOP, personnel, and IT/support system. Here are 4 best practices to ensure a smooth transition into e-Invoicing for your SME business.
Types and Transactions of E-Invoices / Self-Billed / Consolidated Invoice
- What are the types of e-invoice?
The types of e-invoice are invoice, credit note, debit note, and refund note. Purchase orders (PO) are not considered e-invoices.
- What is a self-billed e-invoice?
A self-billed e-invoice is generated by the buyer for transactions where the supplier or service provider cannot issue an e-invoice, such as with agents, foreign suppliers, profit distributions, and certain other cases.
- What kind of transactions can self-billed invoices be issued for?
Ecommerce, payments to agents, dealers, and distributors, and goods sold or services rendered by foreign suppliers.
- Which industries do not allow the preparation of consolidated e-invoices?
Automotive, aviation, construction, and wholesalers/retailers of construction materials.
- What is a periodic statement of billing, and when is it used?
A periodic statement of billing is an e-invoice issued on a regular basis (e.g., monthly) for services like digital services, electricity payments, financial services, healthcare, insurance, stockbroking, and telecommunications.
- Is e-invoicing mandatory for all business transactions?
E-invoicing is mandatory for B2B and B2G transactions. For B2C transactions, e-invoicing can be used or consolidated receipts can be issued.
- When should a self-billed e-invoice be created?
Self-billed e-invoices should be created for commissions to agents, purchases from foreign suppliers, profit distributions, e-commerce transactions, betting payouts, and acquisitions from non-business individuals.
- Can foreign transactions (for employee’s staff claims) be claimed through e-invoicing?
When it comes to staff claims for disbursement or reimbursement, domestic expenses (in Malaysia) must have e-invoice, either in the employee’s name or the company’s name. For foreign expenses (outside Malaysia), self-billed e-invoice is not required as the foreign invoice / receipt will suffice.
- Should an e-invoice be issued for rental property by an individual?
No, property rented by an individual is not considered a business, so no e-invoice is needed.
- Does my invoice portal have a self-bill e-invoice module?
Likely yes. Do check with your service provider on their implementation updates.
- Are self-bill e-invoices needed for Facebook advertisements?
Yes, Facebook advertisements require self-bill e-invoices.
- Are self-bill e-invoices needed for dividends and director fees?
No, self-billed-invoices are not needed for tax paid dividends by a Malaysian registered entity, and director fees. However, distribution of profit by a Limited Liability Partnership (LLP) is still subject to issue e-invoice.
- Can an e-commerce platform issue e-invoices to individual buyers?
Yes.
How to Issue and Manage E-Invoice / Self-Billed / Consolidated Invoice
- How much time does my customer have to reject an issued e-invoice?
72 hours (including non-business hours and public holidays).
- What should be included in a periodic e-invoice statement?
A periodic e-invoice should include all transactions within the billing period, previous balances, payments, credits, and the total amount due.
- When issuing an e-invoice for a foreign buyer, what number should I input in the TIN field?
EI00000000020.
- As a foreign supplier, when preparing a self-billed e-invoice, what number should I input in the TIN field?
EI00000000030.
- Do I need to issue an e-invoice for a refundable deposit?
No.
- How are staff benefits like gym memberships handled in e-invoicing?
Staff benefits, if covered under the employer’s policy, can be claimed using receipts or invoices issued in the employee’s name.
Under the e-invoicing system, proof of expense is required for employment perquisite and benefits in kind.
- What should I take note of for handling claims and reimbursements under the new e-invoicing system?
Ensure that receipts and invoices are under the company’s details for easier claims, and update company policies to reflect the new e-invoicing requirements to avoid any confusion during reimbursements.
Learn more about the new e-Invoice process for staff claims.
- How can employees claim expenses under the new e-invoicing system?
Employees can claim expenses like utility bills, parking, and gym memberships under their name, provided these are covered by the employer’s policy.
- How should e-invoices be handled for machinery sales with down payments and installments?
If the payment is made via hire purchase, the bank will issue periodic e-invoices for each installment or specify the percentage paid.
If the payment is for normal installment with creditors, the e-invoice should be issued wholly on the invoice and not on the installment payments.
- For consolidated e-invoice, can a normal receipt be issued if complete customer information is not available within 7 days?
Yes, issue a normal receipt if complete information is not available; do not issue an e-invoice until all details are collected.
- Is an e-invoice needed for pre-payments?
Yes, issue an e-invoice when the supply is completed. If the supply differs from the payment, issue a credit or debit note.
- How to handle non-business individual rental e-invoices?
Issue a monthly self-bill e-invoice as per the rental agreement.
- Is a hard copy needed for e-invoice submission?
No, a hard copy is not needed, but ensure your accounting department has access to the e-invoices.
- How should I write the description on the e-invoice be simple and reference a quotation number?
The item description should be detailed, including model and unit, and the rest of the invoice should follow normal invoice practices for clarity.
- Is there a link to try issuing an e-invoice on the LHDN website?
As of 24/06/2024, LHDN has released the MyInvois Portal (Testing Environment) that allows Phase 1 taxpayers to try the functions provided in the portal as follows:
- Profile Management: Enables management of profiles for User, Taxpayers (Company), Representative, ERP System, and Intermediary.
- Document Management: Includes capabilities to Submit, View, Reject, Cancel, and Print documents.
Taxpayers from subsequent phases are expected to gain access to the MyInvois Portal (Testing Environment) starting July 2024.
Use our step-by-step guide for guidance. Do note that all data submitted in the testing environment will not be migrated to the MyInvois Portal production environment (actual).
- Does a consolidated e-invoice need to be shared with my customer/buyer?
No.
- When is the due date to submit my consolidated e-invoice?
Within 7 days of the following month.
- When is the latest date to issue self-billed e-invoices for imported goods?
At the end of the month following the month you obtain customs clearance on your goods.
Requesting and Receiving E-Invoices
- How do I request an e-invoice from a petrol station?
When purchasing petrol, you can request an e-invoice through the retail app by providing some details such as company name and other relevant information. The request will be validated, and you’ll receive the e-invoice.
- How do I request an e-invoice through a website / ecommerce site?
If you are buying something through a retailer’s website or ecommerce platform such as Shopee, Lazada or Taobao, you can fill in the necessary details on the web portal to request an e-invoice.
- Can I get an e-invoice after the transaction is completed?
Yes, you can make a post-transaction request for an e-invoice through the merchant’s mobile app or website, provided you meet certain requirements and do it within the stipulated time frame.
- How can my client receive my company’s e-invoice?
Clients can receive e-invoices through various methods:
- Print on the spot if you are using a post system.
- Provide through a website or mobile app if available.
- Send via email if the client’s email is obtained. The timing and method depend on your service provider.
5. If an e-invoice request is rejected, do we have to wait for LHDN notification to resubmit?
No, you don’t need to wait for a specific notification from LHDN to resubmit. However, it’s important to understand the reason for the rejection before resubmitting.
E-Invoicing for F&B
- Do cafes need to separate the submission of e-invoices for food, cigarettes, and alcohol (due to difference in SST %)?
No, you’re not required to separate the e-invoices to your customers.
- Can a restaurant refuse to issue an e-invoice?
No, restaurants must issue an e-invoice if requested.
- If a food court in Malaysia rents stalls to hawkers, should the stall rental follow the 8% SST? (The SST guideline indicates that F&B group B- facilities rental needs to charge 8%)
Tenants of the stalls from the compound of the F&B operators are exempted from SST unless they met the stall’s threshold of RM1.5mil. Upon surpassing this threshold, SST is charged at 6% and not 8%.
How E-Invoice Works in Specific Scenarios
- What is considered income between the invoice date and the submission date?
The invoice date is considered the income date. Ideally, the invoice date and submission date should be the same day, or at least within the same month.
- How can I confirm if a customer’s purchase (Phase 1 of the e-invoicing process) report matches my sales?
You cannot confirm this directly if you are in Phase 2 / 3 of the process, which is issuing e-invoices. They can only match your supporting documents.
- Do I need to issue an e-invoice if I am planning to sell off my business to another individual / company?
The sale of your business is considered a capital gain, therefore an e-invoice is not required.
However, if the sale of your business includes a physical property sale i.e shop / office, then it depends as it can be classified under PPE / IP. In this scenario, if the transaction is made between:
Business to Person – Yes
Business to Business – Yes
Person to Person – No
- Can handwritten receipts be used for a construction business?
Avoid handwritten receipts. Validated e-invoices are required for all construction business transactions.
- What should be done if a customer changes payment terms after issuing an e-invoice?
If terms change, the customer can reject and request for a new e-invoice to be issued.
More specifically, if the new payment terms do not affect the value of the service as stipulated in the e-invoice, there’s no need for a new e-invoice to be issued. However, if it does affect the value, the company may issue an e-invoice credit note or debit note for making adjustments.
- How do I handle e-invoices if my company is not ready but the customer is?
Provide a normal invoice until your company has moved into the implementation stage.
- How do I handle reimbursement in e-invoicing?
For reimbursements, the supplier providing additional services issues an e-invoice directly to the buyer. The intermediary pays the supplier and provides proof of payment to the buyer, who then reimburses the intermediary.
- What is disbursement in e-invoicing?
In disbursement, the supplier providing additional services issues an e-invoice to the intermediary, who then includes this amount in their e-invoice to the buyer along with their service fees.
9. What’s the payment mode for reinvestment cases (trading of investments or securities)?
Payment is a commercial arrangement between the supplier and buyer. An e-Invoice is required to be issued for a transaction.
10. I’m currently renting a commercial space (e.g., shop lot) owned by three individual landlords. As the tenant, how do I show proof of my rent as an expense?
Issue a separate self-billed e-invoice to each landlord, i.e., issue a total of three self-billed e-invoices to three individuals.
11. Should an agent for safety training issue an e-invoice?
If the agent needs to issue an e-invoice to the training company, it’s fine. If the agent receives a commission, no e-invoice is needed. The training company issues the e-invoice to the customers.
Advancing with E-Invoicing
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