The Malaysian tax authority (the Inland Revenue Board or IRB) and the Malaysian Digital Economy Corporation (MDEC) have announced details of the country’s new electronic invoice system. Currently,e-Invoicing in Malaysia is not mandatory. However, as confirmed by the IRB, Malaysia will gradually implement e-Invoicing from early 2024. The model will be an example of Continuous Transaction Control (CTC) in the Asia Pacific Region , and will likely follow the Italian SDI model.
We have gathered the top-five questions from our clients and answered them below.
- Who will be under the scope?
The implementation plan will cover all VAT-registered businesses and public entities. Therefore, B2B, B2G, and B2C transactions will be under the scope, as well as organizations that are engaged in domestic or cross-border transactions.
- What is the implementation timeline of the system?
The phased mandatory implementation will begin with selected businesses from June 2024 and will cover all taxpayers by 2027. From January 2024, taxpayers can adopt e-Invoicing voluntarily.
The timeline of the mandatory e-Invoicing implementation is as follows:
June 2024: businesses with an annual turnover of MYR 100 million or more
January 2025: businesses with an annual turnover of MYR 50 million or more
January 2026: businesses with annual turnover of MYR 25 million or more
January 2027: all other taxpayers
- What is the format, and will invoices need a digital signature?
Invoices must be issued in XML and JSON format and a digital signature is mandatory and connected with a digital certificate. Without a hash value of digital signature, issued invoices are not verified that e-Invoice data originates from a specific taxpayer.
4.What are the submission methods?
The Malaysian tax authority introduced the new e-Invoice system recently and stated that they expected a design system similar to Singapore. Singapore is one of the newest Peppol Authorities in the APAC region. However Malaysia e-Invoice system is not combined with Peppol Network.
With the latest announcement related authority introduced two various methods; via Application Programming Interface (API) sent directly to the portale directly to IRBM or through intermediary technology providers. This method is suitable for large taxpayers also the requirement of working as an intermediary technology provider is not clarified.
Second, manually upload or fulfill all required data in a comprehensive form and submit to the public portal . There is a platform developed by the government, named the ‘MyInvois Portal’ that facilitates and supports e-Invoice processes and can also be used for receiving and sending invoices.
- Will there be an archiving period for the invoices?
All validated e-Invoices which contain Unique Identifier number and QR code are submitted to the MyInvois Portal are stored in IRBM’s database.
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