As part of its commitment to modernize tax administration and enhance efficiency, Malaysia is rolling out a National E-Invoicing Program under the provisions of the Income Tax Act 1967 (Section 134A). This program aims to streamline invoicing processes, improve compliance, and facilitate seamless interactions between businesses and tax authorities. Let’s delve into the key aspects of this program:
Implementation Timeline:
- May 2024: IRBM Pilot Project
- The program kicks off with a pilot project led by the Inland Revenue Board of Malaysia (IRBM). This phase will test the system’s functionality and gather feedback from participants.
- August 2024: Large Sales Volume Threshold
- Starting in August 2024, businesses with annual sales exceeding RM 100 million (approximately EUR 20 million) are mandated to adopt e-invoicing.
- January 2025: Medium Sales Volume Threshold
- From January 2025, businesses with annual sales exceeding RM 25 million (approximately EUR 5 million) must also transition to e-invoicing.
- July 2025: All Other Taxpayers
- By July 2025, e-invoicing becomes mandatory for all other taxpayers, regardless of their sales volume.
Scope of E-Invoicing:
- The program covers both domestic and cross-border invoices across various transaction types:
- B2B (Business-to-Business)
- B2G (Business-to-Government)
- B2C (Business-to-Consumer)
Pre-Clearance Model and Post-Clearance Exchange:
- The e-invoicing system operates on a centralized pre-clearance model, driven by the Malaysian tax authority (LHDN). This ensures that invoices are validated before issuance.
- Additionally, businesses can exchange post-cleared invoices via the Peppol Network, facilitated by the Malaysia Digital Economy Corporation (MDEC). Peppol enables secure and standardized data exchange.
E-Invoicing Portals:
- MyInvois Portal (Manual Issuance):
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- Accessible to all taxpayers, the MyInvois portal allows manual issuance of e-invoices. It caters to small and micro businesses that prefer a user-friendly interface.
- MyInvois System (API Integration):
- Designed for large taxpayers or businesses with substantial transaction volumes, the MyInvois system provides an API-based solution. It seamlessly integrates with existing accounting and ERP systems.
Technical Specifications and Tools:
- Software Development Kit (SDK):
- Released on February 9, 2024, the SDK equips developers with the necessary tools to integrate e-invoicing functionalities into their software applications.
- The Inland Revenue Board of Malaysia (IRBM) updated guidelines and the Software Development Kit (SDK) for the MyInvois System on April 6, 2024, focusing on the gradual implementation of e-invoicing. The SDK 1.0 updates include enhancements like validations, documentation, new features, and guidance on digital signatures. The SDK update addresses e-signature requirements for the upcoming CTC mandate, set to commence in August 2024. According to the update, all documents must have an e-signature using certificates issued by Certification Authorities recognized by the Malaysian Communications and Multimedia Commission. The requirement necessitates the use of local certificates for e-invoice signing, as foreign Certification Authorities are currently not acknowledged in Malaysia. The revised e-invoice guidelines aim to clarify provisions and provide clearer instructions for implementation, facilitating smoother e-invoicing adoption in line with Malaysia’s commitment to digital transformation and efficiency in tax administration.
- MY PINT 1.0 Technical Specifications:
- Published on February 26, 2024, these specifications outline the technical requirements for compliant e-invoicing.
Malaysia’s National E-Invoicing Program represents a significant leap toward a digital economy, fostering transparency, accuracy, and ease of doing business. Businesses should prepare for the upcoming milestones to ensure seamless compliance with this transformative initiative.
Source VATupdate.com – Your FREE source of information
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