Compliance Review Framework for Malaysia’s e‑Invoicing Implementation

• Objective
  Provides the framework guiding how the Inland Revenue Board of Malaysia (HASiL/LHDNM) will assess taxpayer compliance with mandatory e‑invoicing requirements. Aims to ensure fair, transparent, and consistent audits under digital tax administration initiatives, aligned with the 12th Malaysia Plan. [hasil.gov.my]

Contents Breakdown

• Introduction & Legal Basis
  • Introduces the framework and its alignment with tax laws: Income Tax Act 1967, Petroleum (Income Tax) Act 1967, and Labuan Business Activity Tax Act 1990. [hasil.gov.my]
• Objectives of Compliance Checks
  • Encourage voluntary adherence to e‑invoicing regulations.
  • Ensure system integrity by confirming taxpayers’ issuance of e‑invoices per legal provisions. [hasil.gov.my]
• Scope & Process of Audits
  • Describes comprehensive audit processes:
    • Initial Stage: Notification of audit at least 14 days in advance; coordination and possible deferral if necessary.
    • On‑site Audit: Verification of invoices, credit/debit notes, accounting records, e‑invoice systems, and interviews with personnel.
    • Records Review: Access to both physical and electronic records; copy taking as needed. [hasil.gov.my]
  • Audit duration ranges from 1–3 days, extendable based on complexity. [hasil.gov.my]
  • Tax year coverage spans up to two assessment years, with legal action allowable for twelve additional years. [hasil.gov.my]
• Findings and Follow-Up Actions
  • Categories for outcomes:
    • Compliant
    • Non-compliant
    • Exempt/not applicable
  • Non-compliance triggers a “Failure Report” and offers for compound settlements. [hasil.gov.my]
  • Taxpayers may appeal within 18 calendar days; silence equals acceptance. [hasil.gov.my]
• Resolution Timeline
  • Compliance cases are concluded within 90 days from commencement of audit, unless further verification is needed. [hasil.gov.my]
• Voluntary Disclosure Mechanism
  • Taxpayers can submit voluntary disclosures of e‑invoicing errors anytime before audits commence.
  • Includes required documentation and processes (e.g., audited accounts, tax returns, invoices).
  • LHDNM may review and request clarification; acceptance finalizes the case. [hasil.gov.my]
• Rights & Responsibilities
  • Audit Officers (PEI):
    • Must conduct audits ethically, professionally, transparently, and impartially.
    • Must present credentials; restricted from personal gain or influencing taxpayer agent selection. [hasil.gov.my]
  • Taxpayers:
    • Required to provide full cooperation, access to premises, records, and tools for document review.
    • Responsible for maintaining proper records per standard guidelines.
    • Prohibited from offering gifts or payments to audit officers. [hasil.gov.my]
  • Entitled to appoint registered tax agents or interpreters, with formal notifications required. [hasil.gov.my]

✅ Summary

The “Rangka Kerja Semakan Pematuhan e‑Invois” document formally sets out HASiL’s approach to monitoring and enforcing e‑invoicing compliance. It establishes:

• A clear legal framework and objectives.
• Structured audit procedures, including notification, fieldwork, record examination, and resolution timelines.
• Defined taxpayer and officer responsibilities.
• Mechanisms for dealing with non-compliance, voluntary disclosures, and appeals.

Overall, this framework reinforces Malaysia’s digital tax administration and ensures consistent, transparent enforcement of e‑invoicing standards.