E-Invoice Specific Guidelines: A Comprehensive Overview

1. INTRODUCTION

1.1 Inland Revenue Board of Malaysia (IRBM) has issued the e-Invoice Guideline on 21 July 2023.

1.2 The e-Invoice Guideline addresses the scope of implementation of e-Invoice, covering the concept of e-Invoice and step-by-step guidance on the e-Invoice workflow.

1.3 The IRBM has issued e-Invoice Specific Guideline in response to the need for further guidance on specific areas of e-Invoice, aiming to aid taxpayers in gaining a better understanding of certain e-Invoice treatment and ultimately, to successfully implement e-Invoice.

1.4 The appendices to this document form part and parcel of this e-Invoice Specific Guideline. The information provided in the appendices provide additional guidance to taxpayers on how to complete the requirements for issuance of e-Invoice as well as to enhance taxpayers’ understanding on e-Invoice implementation using general and industry-specific examples.

2. OBJECTIVE

This Specific Guideline is to provide further guidance on the issuance of e-Invoice relating to the following areas:

i. Transactions with Buyers

ii. Statements / Bills on a periodic basis

iii. Disbursement and reimbursement

iv. Employment perquisites and benefits

v. Certain expenses incurred by employee on behalf of the employer vi. Self-billed e-Invoice

vii. Transactions which involve payments (whether in monetary form or otherwise) to agents, dealers or distributors

viii. Cross-border transactions

ix. Profit distribution (e.g., dividend distribution) x. Foreign income

xi. Currency exchange rate

xii. E-commerce transactions

xiii. e-Invoice treatment during interim relaxation period

3. TRANSACTIONS WITH BUYERS

3.1 Currently, businesses (Suppliers) will issue a receipt / bill / invoice in hardcopy and/or softcopy (e.g., via e-mail) to customers (Buyers) to record a transaction (e.g., sale of products or provision of services to Buyers for personal consumption).

3.2 Upon implementation of e-Invoice, Suppliers are required to issue e-Invoice for all of its transactions. However, certain Buyers, particularly customers and certain businesses, may not require an e-Invoice as proof of expense.

3.3 To assist the Suppliers in complying with e-Invoice requirements and to reduce the burden to both Suppliers and Buyers, the IRBM allows the Suppliers to consolidate the transactions with Buyers (who do not require an e-Invoice) into a consolidated e-Invoice on a monthly basis.

3.4 Figure 3.1 provides an overview of invoicing process.

3.5 Scenario 1: Where the Buyer requires an e-Invoice

3.5.1 In relation to a particular transaction, Buyer that requires an e-Invoice would need to make a request by informing the Supplier accordingly.

3.5.2 Upon receiving the request from the Buyer for an e-Invoice, Supplier obtains the Buyer’s details (refer Table 3.1 of this e-Invoice Specific Guideline for further details) required for the issuance of e-Invoice.

3.5.3 In summary, the steps involved for issuance of an e-Invoice to Buyer are as follows:

Step 1: Supplier seek confirmation from Buyer if an e-Invoice is required.

Step 2: If the Buyer confirmed that he / she requires an e-Invoice, the Buyer is required to furnish the Supplier

with the required information to facilitate the issuance of

e-Invoice (refer Table 3.1 of this e-Invoice Specific

Guideline for further details).

Step 3: The Supplier is required to complete the remaining required fields as outlined in Appendices 1 and 2 of

e-Invoice Guideline and proceed to issue an e-Invoice.

The process of issuing an e-Invoice is similar to the

e-Invoice workflow as discussed in Section 2.3 (e-Invoice

model via MyInvois Portal) and Section 2.4 (e-Invoice

model via API) of the e-Invoice Guideline.

Step 4: The validated e-Invoice can be used as the Buyer’s proof of expense, to substantiate a particular transaction for tax purposes.

3.5.4 In facilitating a more efficient e-Invoice issuance process as well as to ease the burden of individuals in providing their Tax Identification Number (TIN) and identification number details, IRBM provides the following concession to individuals:

(a) For Malaysian individuals to provide either:

i. TIN;

ii. MyKad / MyTentera identification number; or

iii. Both TIN and MyKad / MyTentera identification number. (b) For non-Malaysian individuals to provide either: i. TIN; or

ii. Both TIN and passport number / MyPR / MyKAS identification number.

For clarity, (b)(i) refers to the TIN assigned by IRBM. In the event that the non-Malaysian individual does not have a TIN, Supplier may use the general TIN (as listed in Appendix 1 of this e-Invoice Specific Guideline), along with the passport number / MyPR / MyKAS identification number of the said individual.

3.5.5 In summary, the details to be provided by the individual Buyers for the issuance of e-Invoice are as follows:

3.5.6 The details to be provided by the individual Shipping Recipient for the issuance of Annexure to the e-Invoice are as follows:

3.5.7 In the event the individual Buyer and/or individual Shipping Recipient (where applicable) provides either TIN or MyKad / MyTentera identification number (instead of both), the Supplier should input the following details for e-Invoice purposes:

Table 3.3 – Details of TIN and identification number / passport number to be included by Supplier for issuance of e-Invoice to individual Buyer / individual Shipping Recipient

Example 1

Mr. Soo (Buyer) spent RM2,500 to buy a smartphone from Global Telco Sdn Bhd (Supplier) and has requested for an e-Invoice to be issued.

Global Telco Sdn Bhd has requested for Mr. Soo’s personal details to proceed with the issuance of e-Invoice. Mr. Soo has provided all the details required (including his MyKad identification number), except his TIN. Global Telco Sdn Bhd is still able to issue an e-Invoice to Mr. Soo despite Mr. Soo’s TIN has not been provided.

Upon receiving the validated e-Invoice, Mr. Soo will be able to use the validated e-Invoice as a proof of expense to substantiate for tax purposes.

Figure 3.2 illustrates an example of visual representation of validated e-Invoice issued by Global Telco Sdn Bhd to Mr. Soo.