Micro, small and medium enterprises (MSMEs) that are earning less than RM150,000 annually are not required to issue e-invoices, Finance Minister II Datuk Seri Amir Hamzah Azizan announced in Parliament on 2 July 2024.
Nevertheless, the government encourages small traders to participate in the e-invoicing initiative to promote business digitalisation, in line with the national aspiration.
FM Amir Hamzah acknowledged the challenges MSMEs face with e-Invoices, such as higher operational costs, technology adoption, and knowledge gaps. He outlined two methods for e-Invoice transmission: using the MyInvois portal or point-of-sale system, and integrating business accounting systems with MyInvois.
Tax Breaks and Reduced Claim Periods to Support SME E-Invoicing Adoption
The government plans a flexible transition to e-Invoicing, focusing on education and correction, and will assist all companies, including MSMEs, in fully implementing e-Invoicing.
To support this transition, the government offers tax incentives, including reducing the capital allowance claim period for ICT equipment and software from four years to three years starting in 2024. MSMEs can also get a tax deduction of up to RM50,000 annually for consulting fees from 2024 to 2027.
The Malaysian government will also now allow micro, small, and medium enterprises (MSMEs) to issue consolidated e-Invoices that combine all sales transactions for each month. These e-Invoices must be submitted to the Inland Revenue Board of Malaysia (LHDN) within the first seven days of the following month.
Refresher on E-Invoice vs Consolidated Invoices
In general, e-Invoices and consolidated invoices serve different purposes. An e-Invoice is a digital version of an invoice created, transmitted, and received electronically for each individual transaction. It allows for real-time or near-real-time reporting and ensures compliance with tax regulations. These invoices often require integration with electronic invoicing systems like MyInvois.
Use our step-by-step guide for guidance on using the MyInvois Portal Testing Environment (Available since 24/06/2024 for Phase 1 taxpayers). Do note that all data submitted in the testing environment will not be migrated to the actual MyInvois Portal production environment
On the other hand, a consolidated invoice summarizes all sales transactions for a month into a single invoice, simplifying record-keeping and reporting. This type of invoice reduces the administrative burden by combining multiple transactions into one report. MSMEs can submit consolidated e-Invoices to the Inland Revenue Board within the first seven days of the following month, making it easier to manage and report transactions in bulk.
The main difference lies in the frequency and detail of reporting: e-Invoices are for individual transactions and immediate reporting, while consolidated invoices offer a periodic summary for ease of management.
Advancing with E-Invoicing
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