Malaysia Software Solutions Provider

Automate Your E-Invoicing

Contact us now for a
FREE e-Invoice Readiness Assessment

Malaysia e-Invoice

Malaysia's LHDN e-Invoice Compliance

The government is moving forward with the implementation of e-Invoice for Malaysian businesses according to Datuk Dr. Mohd. Nizom. The crux behind this initiative is tax compliance besides the benefits of digitalization of business processes. According to Datuk Nizom, the e-Invoicing initiative will help to stem leakages in taxes arising out of the shadow economy.

Subsequently, Deputy Finance Minister Steven Sim who confirmed that the e-invoicing service, reaffirmed that Malaysia e-invoice mandate will begin as early as January 2024 as a pilot project and businesses with annual sales exceeding RM 100 million will be required to utilize the service by June 2024.

hand

Benefits of e-Invoice

UNIFIED INVOICING PROCESSING

FACILITATED TAX RETURN FILLING

ENABLES STREAMLINING OF OPERATIONS

DIGITALIZED FINANCIAL REPORTS

Malaysia e-Invoice Guideline

LHDN released the much awaited guideline on the 21st of July 2023. There is a page on LHDN’s website that is dedicated to the e-Invoice initiative. You can obtain updates and news from LHDN from this site as illustrated.

Nevertheless, if you do not have access to the guide, please download from the highlighted link below. There is an anticipation on further updates to the guide in the near future; such as more information as to how retail related invoices will be treated as compared to B2B transactions. 

Furthermore, e-Invoice will be implemented in phases to ensure smooth transition. The roll-out of e-Invoice has been planned with careful consideration, taking into account the turnover or revenue thresholds, providing businesses with sufficient time to adapt. The chart on the right is the tight e-Invoice implementation timeline. As a result, please refer and act accordingly.

(https://www.hasil.gov.my/en/e-invoice/)

New guidelines: www.hasil.gov.my/media/nofmzbk1/irbm-e-invoice-guideline-version-20.pdf

Pilot Phase - To be confirmed

Launch of pilot programme will announced in due course

Phase 1 (>100MIL) - August 1st, 2024

Mandatory Implementation for taxpayers with an annual turnover or revenue of more than RM100 million

Phase 2 (Between 25MIL & 100MIL) - Jan 1st 2025

Mandatory implementation for taxpayers with an annual turnover or revenue between RM25 million to RM100 million

Phase 3 (All) - July 1st 2025

Mandatory for all taxpayers

Updated New Guideline

Updated on Oct 5th 2023 based on e-Invoice Guideline version 2.0 & Specific Guideline 1.0, dated on 29 Sept 2023

2 Scenarios for e-Invoice to be issued

1. Proof of Income
2. Proof of Expense

4 type of e-Invoice transactions - proof of income and expenses

1. Invoice
2. Credit Note
3. Debit Note
4. Refund

4 Types of e-Invoice submission

1. Standard e-Invoice
2. Self-Billed e-Invoice
3. Consolidated e-Invoice
4. Frequency of Billing

Exemption list from e-Invoice

1. Ruler and Ruling Chief​, Former Ruler and Ruling Chief​, Consort of Rulers and former rulers
2. Government, State Gov't and State Authority, Local Authority
3. Statutory authority and statutory body
4. Facilities provided by Gov't
5. Consular offices and diplomatic officers and related employees

How does e-Invoice Compliance Works ?

This is an overview of the e-Invoice workflow from the point a sale is made or transaction undertaken, and an e-Invoice is issued by the supplier via MyInvois Portal or API, up to the point of storing cleared e-Invoices on LHDNM’s database for taxpayers to view their respective historical e-Invoices.

The focus of our solutioning is the e-Invoice model via API.

API allows taxpayers to submit e-Invoices directly to LHDNM. Taxpayers would need to configure the API integration by setting up call-backs (specific taxpayers system addresses) and log into the available LHDNM APIs via the Digital Certificate issued by LHDNM (authentication mechanisms).

The e-Invoice structure has been specifically designed to cater to B2B, B2G and B2C transactions to ease e-Invoice procedures for businesses and individual taxpayers. The following formats will be available for transmission of e-Invoice data:

Firstly, Extensible Markup Language (XML): XML is defined as a simple text-based format for representing structured information. It is one of the most widely used formats for sharing field structured information today. The syntax rules for XML are strict. It will not process files that contain errors and error messages will be sent to inform that rectification is required. Almost all XML documents can be processed reliably by computer software.

Secondly, is JavaScript Object Notation (JSON): JSON is a lightweight text-based data interchange format that is simpler to read and write as compared to XML. Though it is derived from a subset of JavaScript, it is language independent. Therefore, the code for generating and parsing JSON data can be written in any other programming language.

There are 51 data fields that are required to issue an e-Invoice. These fields are grouped into nine (9) categories:

1. Address

2. Business Details

3. Contact Number

4. Invoice Details

5. Parties

6. Party Details

7. Payment Info

8. Products / Services

9. Unique ID Number

In addition, for specific circumstances, an annex will be required to be submitted as part of the e-Invoice to LHDNM.

For drop shipment - export & import, an additional 6 mandatory data fields to be submitted.

Formats for transmission:

XML

JSON

GET A FREE E-INVOICE
READINESS ASSESSMENT TODAY

You can begin your E-invoicing journey with us. Just contact us now! We can provide a free E-Invoice Readiness Assessment. Our assessment will provide you an insight and guidance on how you can plan to fulfill Malaysia e-invoice mandate.

Explore our solutions to your Malaysia e-Invoice Compliance

MountainTop e-Invoice Solution

1) Our MT e-Invoicing solution is compatible with any standard ERP such SAP, Oracle, Navision and etc. 

2) We developed an e-Invoicing solution that is globally compliant with each country’s requirements or with PEPPOL standard.

3) As a middleware, MountainTop e-Invoice solution works to integrate your current ERP with LHDN through API.

4) MountainTop e-Invoice solution will obtain required data from your current ERP. For any missing data from your current ERP, users can update or maintain through MountainTop e-Invoice console.

PRONTO ERP e-Invoice Ready

1) Pronto ERP system already has e-Invoicing module build in and ready to use but, of course we need to fine tune according to Malaysia’s LHDN SDK (Software Development Kit) guidelines

2) In order to comply with LHDN’s requirement, Pronto already has e-Invoicing features build in such as additional configurations and master fields. 

3) Our Pronto ERP comes with PEPPOL ready-made framework.