LHDN’s e-Invoicing Regime: What Businesses Need to Know Now

Sending invoices digitally is NOT e-Invoicing.

Keeping in tune with the tax theme that we have had here on P&L in the last few weeks, today we dive into e-Invoicing in Malaysia and the guidelines have been issued with Mohd Haizam Abdul Aziz, Director of Tax at PwC.

Haizam gets into the basics of e-Invoicing, how it will be applied and the process flow, as well as how this will impact businesses and their operations, the possible teething issues, and how businesses can align their operations with this new regulatory requirement. We'll also explore the dual pathways for transmitting e-invoices — the IRB’s MyInvois Portal and direct API integration, as well as which path suits which business.

Basic Background Information on e-Invoicing:

As explained by LHDN, an e-Invoice is a digital representation of a transaction between a supplier and a buyer and replaces paper or electronic documents such as invoices, credit notes, and debit notes. It extends to both domestic and international transactions, covering business-to-business (B2B), business-to-consumer (B2C) and business-to-government (B2G) transactions.

e-Invoicing will be applicable to all taxpayers undertaking commercial activities in Malaysia, and the phased implementation will start on August 1st 2024, with full implementation in July 2025.

Phase 1 kicks off on August 1st 2024 for taxpayers with an annual turnover or revenue of more than RM100 million. However, the IRB also welcomes organisations who fall outside of this criterion but are ready to volunteer themselves for the implementation. Phase 2 will start on January 1st 2025 for taxpayers with an annual turnover or revenue of more than RM25 million, and Phase 3 from July 1st 2025 for all taxpayers undertaking commercial activities.