Malaysia E-Invoice Guideline
1. What Is E-Invoice?
LHDN E- is a machine-readable format and not a human-readable PDF invoice. Malaysia LHDN e-Invoice only takes machine-readable such as, JSON files, XML, not PDF, DOC, JPEG, or email.
LHDN need to approve and validate by (IRB) Inland Revenue Board for every invoice that has been sent before it can be printed as a verified invoice for your client or customer. IRBM will validate includes TIN and e-Invoice data structures or format. During validation of the e-Invoice, supplier is must share the cleared e-Invoice with the buyer after embedding the validated link (provided by IRBM) in a form of QR code on the e-Invoice. The QR code can be used to validate the existence and status of the e-Invoice via MyInvois Portal.
2. Factors Influencing the Duration of E-Invoice Validation
As per the latest guidelines from IRBM’s e-Invoice version 1.0, the Continuous Transaction Control (CTC) Model is set to be implemented, ensuring near-instantaneous validation by IRBM.
3. Which Entities To Implement E-Invoice?
Starting 1st August 2024 Malaysia businesses can willingly implement E-Invoice with the (IRB) Inland Revenue Board (LHDN). E-Invoice will be compulsory for all businesses based on their turnover or revenue thresholds, and will be implemented in phases. Businesses with annual turnover more than RM 100 million the original implementation date of June 1, 2024, has been postponed to August 1, 2024. However, following the budget announcement by the Prime Minister on October 13, 2023, the implementation date for all other businesses has been bring forward by 18 months early to July 1, 2025. The implementation details are as follows:
Phrase | Budget 2024 Announcement | Annual Turnover / Revenue |
1 | 01 August 2024 | RM100 million |
2 | 01 January 2025 | RM50 million |
3 | 01 January 2025 | RM25 million |
4 | 01 July 2025 | All tax payers and some non-business transactions |
4. What E-Invoice Information Will Be Store In IRBM Database?
All invoice issued must contain the following information, which will be stored in the IRBM Database. This information is needed to ensure the authenticity, integrity, and traceability of e-Invoices. It possible also used by the tax authorities to prove the accuracy of tax returns.
- General Information:
Includes the invoice number, e-Invoice type, e-Invoice purpose, e-Invoice date (current date). - Supplier & Customer Information:
Includes the supplier and customer’s TIN, name, address, email address, 5 digit MSIC code, MSIC description, website, contact person, and contact number, company registration number/individual myKad (IC) number/passport, SST registration number, currency, exchange rate. - Item Information:
Includes the description, quantity, UOM, unit price, discount rate, discount amount, tax type, tax code, tax rate, and tax amount, tariff code, subtotal, total excluding tax, total including tax for each item on the invoice. - Validation Information:
Includes the IRBM Unique Identifier Number, validation date and time, and validation status of the invoice. - Digital Certificates or Signature:
Digital Certificates will be issued to taxpayers to enable them to attach digital signatures to e-Invoices. The digital signature will verify that the submitted e-Invoice data originates from a specific taxpayer. - Additional Information (Optional):
Include payment mode, supplier bank account, payment terms, payment amount, payment date, payment reference number, bill reference number, or any other relevant information.
5. What Is Tax Identification Number (TIN) Number?
Nombor Pengenalan Cukai also known as TIN number in Malaysia is a Tax Identification Number. It is a unique number assigned to individuals and entities registered as taxpayers with the Inland Revenue Board of Malaysia (IRBM). The TIN number is used by the IRBM to identify taxpayers and track their tax records. It is also utilized by the IRBM to monitor taxpayer compliance and detect tax evasion.
The Inland Revenue Board of Malaysia (LHDN) has announced an update to the format of Tax Identification Numbers (TINs) for Malaysian taxpayers. New format will be effective from January 1, 2023.
The old TIN format was a 12 or 13-digit number, with the first one or two letters indicating the type of taxpayer, such as “SG” for individual residents or “C” for companies. The remaining digits constituted a unique identifier for the taxpayer.
The new TIN format will consist of a 13-digit number. The first two letters will be “IG,” which stands for “Individual taxpayer.” The remaining 11 digits will remain the same as the old TIN number.
Please visit the LHDN website to get more information about the new TIN format.
