In support of advancing the digital economy, our Government is set to progressively roll out e-Invoice to enhance the efficiency of tax administration management in Malaysia. The introduction of e-Invoice aims to enable near real-time validation and storage of transactions, covering Business-to-Business (B2B), Business-to-Consumer (B2C), and Business-to-Government (B2G) transactions.As announced in the recent Budget 2024, e-Invoices will be implemented in phases effective 1st August 2024, based on businesses' annual revenue or turnover thresholds.
By 1st July 2025, all businesses, regardless of size, must issue e-Invoices to enjoy greater accuracy, business efficiency and productivity. Ensuring that your software is compatible and ready for integration is crucial for full compliance.What is an e-Invoice?An e-Invoice is a digital representation of a transaction between a supplier and a buyer. e-Invoice replaces paper or electronic documents such as invoices, credit notes, and debit notes.Like a conventional invoice, e-Invoice will contain the supplier’s and buyer’s details, item description, quantity, price excluding tax, tax, and total amount, which records transaction data for daily business operations.
Types of e-Invoice
1. Invoice
A commercial document that itemises and records a transaction between a supplier and a buyer.
2. Credit Note
A document issued by a seller to a buyer to acknowledge that the buyer is owed a refund or credit. It's used in situations like product returns, billing errors, or adjustments in the original invoice.
3. Refund
A document issued by a seller to a buyer to acknowledge the repayment of money for a previous purchase
4. Debit Note
A debit note is a document a seller sends to a buyer to inform them of an increase in the amount they owe. It is often issued when additional charges, corrections, or adjustments to a previous transaction occur.
Implementation TimelineStarting from August 1, 2024, taxpayers with annual income or turnover exceeding RM100 million must use e-invoicing, which will gradually expand to all taxpayers based on different revenue thresholds. This timeline has been established to provide taxpayers sufficient time to prepare and adapt to the implementation of the e-Invoice.The government aims to fully implement the e-Invoicing policy by July 1, 2025, bringing revolutionary changes to tax administration.
Benefits of e-InvoiceThe objective of e-Invoicing is to provide a seamless experience to taxpayers. This implementation also improves business efficiency and increases tax compliance.Below are the benefits of e-Invoicing:
1. Increases Efficiency and Productivity
E-Invoicing unifies the invoicing process by creating and submitting transaction documents and data electronically within a system. This system-based process reduces manual work and reduces the risks of human error.
2. Enhances Precision and Compliance
The seamless integration of the e-Invoicing system facilitates efficient tax filing. Automated checks and quick validations ensure the accuracy and compliance of generated e-Invoices.
3. Streamline Operational Efficiency
Adopting e-invoicing streamlines and enhances the invoicing process's efficiency, saving businesses significant time and cost.
4. Digitalise Reporting
The e-Invoice implementation aligns financial reporting and processes to be digitalised with industry standards.
Are you Ready for e-Invoicing?
Tax revenue is the primary income source for nations to finance diverse development initiatives. Across the globe, countries are leveraging digitised business documents to reduce tax costs and enhance tax efficiency, and Malaysia is actively participating in this trend.
So, why should you adopt e-Invoicing?
Because it serves as the gateway to a more streamlined and brighter future for your business, enabling you to concentrate on core priorities – fostering business growth while complying with LHDN regulations.
Reach out to us and let us help facilitate a seamless transition for your business, hand-in-hand - better together. Register for upcoming e-invoicing events at https://www.mhub.my/e-invoicing.