We mentioned that the APAC region started e-Invoicing to prevent tax evasion and tax non-compliance. It is worth noting that these models, which are already being implemented by some countries in the region, aim to make both e-Invoicing and CTC models mandatory in the future.
In the first part, we have detailed the e-Invoice regulations of Australia, New Zealand, Vietnam, and the Philippines, you can read it by clicking here.
Thailand
E-Invoicing called E-tax invoicing in Thailand is not mandatory. Taxpayers who use e-Invoicing must report to Thai tax authorities. XML, PDF, or others can be chosen as a format of e-Invoices. E-Invoices need to be digitally signed using certificates that are stored on the HSM (Hardware security Module) or USB token. In addition, electronic time stamps that indicate the date of issuance must be added to e-Invoices. In order to submit e-Invoices to the tax authorities, taxpayers can use the following:
- A service provider that is able to transmit e-Invoices to the Thai National System. It is an efficient method for large companies.
- Upload compressed files that are no bigger than 3 MB to the Thai tax office website. Companies that don’t have a significant number of invoices can use this method.
- The host-to-host method, which is mainly for large taxpayers. It requires a direct connection between the taxpayer and the E-tax invoice, also receipt system.
The invoices are submitted in XML format to the Electronic Transactions Development Agency (ETDA) by the 15th of the month after their issuance. In order to promote use of the E-Tax system, the government has approved incentives including double deduction of the investment expenses made for e-Tax invoice systems and more withholding tax rate reduction.
Singapore
IMDA, the tax authority in Singapore, reached a significant milestone in May 2018 by becoming the first PEPPOL authority outside the EU. This marked an important development in the country’s e-Invoicing landscape. In line with their commitment to digital transformation, IMDA launched the nationwide e-Invoicing network in January 2019. As part of the initiative, the network was rebranded as InvoiceNow in September 2020.
The primary objective of IMDA has been to promote the adoption of e-Invoicing in both B2G and B2B environments. Despite its voluntary nature, the government has recently announced plans to mandate the use of InvoiceNow for B2G transactions, although the exact timeline for implementation remains uncertain.
Malaysia
Since 2015, the use of e-Invoicing has been voluntary in Malaysia. To receive electronic invoices, a signed agreement is required between the buyer and the seller. In addition, electronic invoices should be archived for 7 years. A phased introduction of Malaysia e-Invoicing has been confirmed by the Inland Revenue Board (IRB). According to the Implementation plan, it will come into effect gradually between early 2024 and 2027 as follows:
- January 2024: Businesses will be able to implement e-invoicing voluntarily
- June 2024: Mandatory implementation for businesses that reach a sales threshold value of MYR 100 million annually.
- January 2025: Mandatory implementation for businesses that reach a sales threshold value of MYR 50 million annually.
- January 2026: Mandatory implementation for businesses that reach a sales threshold value of MYR 25 million annually.
- January 2027: Mandatory implementation for all businesses.
Options such as adopting PEPPOL standards and using the PEPPOL framework are under consideration. The implementation will likely follow the Italian SDI model.
Indonesia
E-Faktur Pajak is the name of e-Invoicing in Indonesia. To prevent tax fraud and improve trade, the Directorate General of Taxation (DGT) has introduced the e-Faktur obligation. On July 1, 2015, taxpayers based in Java and Bali began to comply with the e-Invoicing obligation. Then, on July 1, 2016, the obligation scope was extended to cover all taxpayers in other regions of Indonesia. After creating e-invoices, it is obligatory to send them in XML format to the tax authority for validation. In order to get approval of the DGT, a serial number (NSFP) and a QR code are included in the invoices.
After the process is concluded, invoices that have digital signatures can be sent to the e-Faktur system, and approved invoices can be sent to the buyer. Registering for the e-Faktur system and obtaining an electronic certificate are required for taxpayers. E-Faktur applications should be used to prepare periodic VAT returns. In addition, invoices will be considered invalid under the following circumstances:
- Invoices are not issued as e-Faktur
- Invoices are not in line with procedures
The implementation of e-Invoicing is based on the clearance model. Before sending the issued invoices to the customer, all issued invoices must be approved by the tax authority.
South Korea
In 2009, South Korea’s responsible authority, the National Tax Services (NTS) introduced their electronic invoicing system called the South Korea e-Tax Invoice. The scope of the regulation covers both B2B (business-to-business) and B2G (business-to-government) transactions. Until recently, parameters have varied according to the NTS’s decisions about turnover, sector, etc. However, with the latest update, the threshold has been reduced to KRW 100 million (about $81,000) from July 2023 for responsible taxpayers in South Korea.
The format of e-Invoices must be XML, and must be signed before uploading to NTS. Taxpayers established in South Korea have different options for their reporting obligations with regard to e-Invoicing, like using Hometax, ERP/ASP, or the Telephone ARS system. Last but not least, to be able to use the e-Tax invoice system, invoice issuers have to get an authenticated digital certificate. Certifications are required for tax reporting, e-notification, tax payment, certification issuance, tax invoice issuance, etc.
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