E-INVOICE – Revamp of Malaysia's Taxation System

$ADB / 0276 (AUTOCOUNT DOTCOM BERHAD) $SLIC / 03008 (SL INNOVATION CAPITAL BERHAD) $AGMO / 0258 (AGMO HOLDINGS BERHAD) $IRIS / 0010 (IRIS CORPORATION BERHAD) $APPASIA / 0119 (APPASIA BERHAD)

❓WHAT IS AN E-INVOICE?
A digital invoice (only be in XML and JSON format files) that has to be validated by the IRB. E-invoicing will replace traditional paper and electronic documents – invoices, credit/debit notes, and refunds.
- Purpose: To fight tax evasion and minimise tax leakage.
- It will contain 53 fields, some compulsory, some if applicable.
- Will enable real-time/near real-time validation of invoices, increasing efficiency.
- Caters to B2B, B2C, and B2G transactions.
- E-Invoices will contain the essential information as a conventional invoice (supplier & buyer details, item descriptions, quantities, prices, etc.).
- ESG involves tax transparency (falls under Governance).

⚖️WHEN ARE E-INVOICES NEEDED?
1. As proof of income when seller sells a product/service.
2. As proof of expenses when buyer buys a product/service from entities that are exempted from issuing e-Invoices.

🔨 IMPLEMENTATION?
PHASE 1 – Taxpayers with over RM100M annual revenue/turnover (implementation 01/08/2024).
PHASE 2 – Taxpayers with over RM25M-RM100M annual revenue/turnover (implementation 01/01/2025).
PHASE 3 – All businesses (01/07/2025).

🗒️TYPES OF E-INVOICES (that you have to upload)?
1. Invoice
2. Debit Note
3. Credit Note
4. Refund Note
~ Only within the scope of sales & purchases.

🧑‍💻E-INVOICE SYSTEM (process):
1. Two ways of issuance of invoice – MyInvois Portal (IRB website, on cloud not server for real-time validation) & API (for larger companies).
2. Then, IRBM validates invoice in real-time (however, there is the possibility of human error).
3. After it has been validated, a notification will be sent to the supplier and buyer.
4. Supplier has to notify the buyer that the invoice has been validated.
5. 6. 7. In the case where information of invoice is wrong, either supplier or buyer has to cancel/request for rejection within 72 hours, then pull back the invoice and redo it.
8. Data of invoice in IRBM cloud will be stored in IRBM database.
9. Supplier and buyer can retrieve invoice data from IRBM cloud.

🌐HOW WOULD BUSINESSES HAVE TO READY THEMSELVES FOR THIS CHANGE?
1. Personnel
- Equip personnel with necessary capabilities to oversee the implementation of e-invoice.
2. Software
- Determine current IT capabilities to support system readiness and processes to comply to e-Invoice requirements (current accounting system, POS, ERP).
3. Review current processes in issuing transaction documents.


Sources: LDHN Malaysia, eStreamSQL, PWC