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E-invoice Transition in Malaysia – Requirements, Processes, and Compliance

  • 25 June, 2024
  • 10 Mins

Highlights

Transactions between buyers and sellers in Malaysia will now be recorded and authenticated by the IRBM authority through the MyInvois portal. While implementing e-invoice transition in Malaysia, the retailers or suppliers would need to compulsorily provide certain details of all their transactions. However, certain buyers, particularly end consumers and certain businesses, may not require an e-invoice as proof of expense.

In this blog, we will discuss the scope of e-invoicing in Malaysia when the buyer asks for an e-invoice, how the supplier generates, sends, and validates the e-invoices, what details the supplier must include, and how the IRBM is helping buyer-seller transactions in Malaysia while implementing e-invoices practices.

E-Invoicing Practices – Transitioning to E-Invoices and Consolidated Monthly Billing

While dealing with e-invoice transition in Malaysia, the businesses (Suppliers) will issue a receipt/ bill/ invoice in hardcopy and/or softcopy (e.g., via e-mail) to consumers (Buyers) to record a transaction (e.g., sale of products or provision of services to buyers for personal consumption).

Upon implementing e-invoices practices, Suppliers must issue e-invoices for all their transactions. However, to ease and assist suppliers in complying with e-invoice requirements and reduce the burden on both suppliers and buyers, the IRBM allows suppliers to consolidate the transactions with buyers (who do not require an e-invoice) into a consolidated e-invoice on a monthly basis.

Scenarios for E-Invoicing in Malaysia – Buyer Requirements and Preferences

There are three scenarios that play out while a supplier is implementing e-invoicing in Malaysia

  1. In the case the buyer requires an e-invoice
  2. When the buyer does not want an e-invoice
  3. Where the buyer wants an e-invoice after receiving a receipt

Scenario 1

When the Buyer requires an e-invoice

For a particular transaction, a buyer who requires an e-invoice must to inform the supplier and request an e-invoice accordingly.

Upon receiving the buyer’s request for an e-invoice, the supplier obtains the buyer’s details for issuing an e-invoice.

The steps involved in the issuance of an e-invoice to the buyer while e-invoice transition in Malaysia are as follows –

First, in Step 1 –

The supplier seeks confirmation from the buyer if an e-invoice is required.

In Step 2 –

If the buyer confirms that he/ she requires an e-invoice, the buyer must furnish the Supplier with the required information to facilitate the issuance of an e-invoice.

Further, in Step 3 –

Supplier must complete the remaining required fields and proceed to issue an e-invoice as per the scope of e-invoicing in Malaysia.

The process of issuing an e-invoice is similar to the e-invoice workflow of the MyInvois Portal and the API e-invoice model.

Lastly, In Step 4 –

The validated e-invoice can be used as the Buyer’s proof of expense to substantiate a particular transaction for tax purposes.

Scenarios for E-Invoicing in Malaysia

Concessions Provided By IRBM

In facilitating a more efficient e-invoice issuance process as well as to ease the burden of individuals while they do e-invoice transition in Malaysia, IRBM authority has been proactive. IRBM provides the following concession to individuals while providing their Tax Identification Number (TIN) and identification number details –

(a) For Malaysian individuals to provide either-

i. TIN;
ii. MyKad/ MyTentera identification number; or
iii. Both TIN and MyKad/ MyTentera identification number.

(b) For Non-Malaysian individuals to provide either –

i. TIN; or
ii. Both TIN and passport number/ MyPR/ MyKAS identification number.

For clarity, the TIN mentioned here in b(i) refers to the TIN assigned by IRBM. If the non-Malaysian individual does not have a TIN, the Supplier may use the general TIN, along with the said individual’s passport number/ MyPR/ MyKAS identification number.

Details To Be Added in the E-invoice By Supplier

The details to be provided by the individual Buyers for the issuance of e-invoice are as follows –

No.Data FieldDetails to be included by Supplier in e-invoiceRemarks
1.Buyer’s NameName of individual Buyer  For Malaysian individuals- Full name as per MyKad/ MyTentera.
For non-Malaysian individuals- Full name as per passport/ MyPR/ MyKAS  
2.Buyer’s TINTIN of individual Buyer For Malaysian individuals  
i. Option 1- TIN only  
ii. Option 2- MyKad/ MyTentera identification number only  
iii. Option 3- Both TIN and MyKad/ MyTentera identification number  
3.Buyer’s Registration/ Identification Number/ Passport Number  Details of registration/ identification number/ passport number  For non-Malaysian individuals  
i. Option 1- TIN only  
ii. Option 2- Both TIN and passport number/ MyPR/  
MyKAS identification number  
For clarity, (i) refers to the TIN assigned by IRBM. In the event that the non-Malaysian individual does not have a TIN, Supplier may use the general TIN (as listed in  
Appendix 1 of this e-invoice Specific Guideline), along with the passport/ MyPR/ MyKAS identification number of the said individual.  
4.Buyer’s Address  Address of individual Buyer  Individual Buyer is required to provide residential address  
5.Buyer’s Contact Number  Telephone number of individual Buyer  Individual Buyer is required to provide a contact number  
6.Buyer’s SST Registration NumberSST registration number of individual Buyer  Where applicable, the individual Buyer is to provide an SST registration number If the individual Buyer is not registered for SST, the Supplier is to input “NA”  

Other Scenarios – Details Needed

In the event the individual Buyer and/or individual Shipping Recipient (where applicable) provides either TIN or MyKad/ MyTentera identification number (instead of both), the Supplier should input the following details for e-invoice purposes –

Option 1 (for Malaysian and non-Malaysian individuals), where the individual Buyer / individual Shipping Recipient only provides TIN –

i. Supplier to input the TIN as provided by individual Buyer / individual Shipping Recipient

ii. Supplier to input “000000000000” in the e-invoice

Option 2 (for Malaysian individuals), where the individual Buyer / individual Shipping Recipient only provides MyKad / MyTentera identification number –

iii. Supplier to input MyKad/ MyTentera identification number provided by the individual Buyer / individual Shipping Recipient

iv. Supplier to input “EI00000000010” in the e-invoice

Illustrative Example

Mr Soo (Buyer) spent RM2,500 to buy a smartphone from Global Telco Sdn Bhd (Supplier) and has requested for an e-invoice to be issued. Global Telco Sdn Bhd has requested Mr Soo’s personal details to proceed with the issuance of e-invoice. Mr. Soo has provided all the details required (including his MyKad identification number) except his TIN. Global Telco Sdn Bhd is still able to issue an e-invoice to Mr. Soo despite Mr. Soo’s TIN has not been provided. Upon receiving the validated e-invoice, Mr. Soo will be able to use the validated e-invoice as proof of expense to substantiate for tax purposes.

Illustrative Example

Scenario 2

Where the Buyer does not require an e-invoice

While e-invoice transition in Malaysia, where the Buyer does not require an e-invoice, the Supplier will issue a normal receipt to the Buyer (the same as current business practice). However, there is no need for submition of such a receipt and IRBM’s validation as this document is not an e-invoice.

Suppliers will be allowed to aggregate transactions with Buyers who do not require an e-invoice monthly and submit a consolidated e-invoice to IRBM within seven (7) calendar days after the month’s end.

Consolidated E-Invoices For Supplier

For consolidated e-invoices, the IRBM allows the Suppliers to adopt one (or a combination) of the following methods –

(a) The summary of each receipt is presented as separate line items in the consolidated e-invoice.

(b) The list of receipts (in a continuous receipt number) is presented as line items (i.e., where there is a break of the receipt number chain, the next chain shall come as a new line item).

Consolidated E-Invoices For Supplier

(c) Branch(es) or location(s) to submit consolidated e-invoice, adopting either (a) or (b) above for the receipts issued by the branch(es) or location(s).

Illustrative Example

Hibiscus Mart is a small retail business offering a wide range of food products and beverages via its two (2) branches in Penang and Kuala Lumpur. The following represents the number of transactions with normal receipts issued alongside the total sales made by each branch (with no e-invoice issued) in October –

(a) Penang branch- 500 transactions amounting to RM25,000
(b) Kuala Lumpur branch- 2,000 transactions amounting to RM65,000

Within 7 calendar days after the end of October (i.e., by 7 November), Hibiscus Mart issues two separate consolidated e-invoice after aggregating the total sales from each branch i.e., one e-invoice for the Penang branch and another e-invoice for Kuala Lumpur branch and its corresponding sales for each branch. Hibiscus Mart consolidated the sales by presenting each receipt number chain as a separate line item. Note that Hibiscus Mart needs to include all the receipt reference numbers that make up the total sales in the “Description” field for the relevant branch.

On the other hand, the seller can consolidate the sales revenue of each branch in separate consolidated e-invoices by presenting each receipt as a single line item.

Details To Be Added in Consolidated E-Invoice

As the parties’ experience e-invoice transition in Malaysia, the supplier shall furnish the following details of the buyer in a consolidated e-invoice –

No.Data FieldDetails to be included by Supplier in e-invoiceRemarks 
1.Buyer’s NameName of BuyerSupplier to input “General Public” in the e-Invoice 
2.Buyer’s TINTIN of BuyerSupplier to input “EI00000000010” in the e-Invoice
3.Buyer’s Registration/ Identification Number/ Passport NumberDetails of registration/ identification number/ passport numberSupplier to input “NA”
4.Buyer’s AddressAddress of BuyerSupplier to input “NA”
5.Buyer’s Contact NumberTelephone number of Buyer Supplier to input “NA”
6.Buyer’s SST Registration NumberSST registration number of BuyerSupplier to input “NA”
7.Description of Product/ ServicesDetails of products or services being billed for a transaction with BuyerThe supplier will follow any of the 3 methods of furnishing information stated above. 

Limitations Put By IRBM

In order to improve the performance of the MyInvois System during e-invoice transition in Malaysia, IRBM authority puts the following limitations –

(a) maximum size of 5MB per submission;

(b) maximum of 100 e-invoices per submission, and

(c) maximum size of 300KB per e-invoice.

As such, suppliers are allowed to split the receipts into several consolidated e-invoices to meet the above requirements.

The consolidation does not apply to self-billed e-invoices except for the following self-billed circumstances –

(a) acquisition of goods or services from individual taxpayers (who are not conducting a business).

(b) interest payment to the public at large (regardless of businesses or individuals).

Scenario 3

Can Buyer Ask For e-invoice After Receiving Receipt

Yes. If Buyers require an e-invoice after receiving a receipt from the Supplier, the Buyer can request it within the transaction month. The timeframe allows the supplier to have a cut-off for the receipt to be aggregated for into the consolidated e-invoice.

While the supplier must aggregate all receipts for a month and make a consolidated e-invoice of these transactions within 7 days of the following month, the buyer can ask for the e-invoice only within the same month of the transaction. If the buyer asks for an e-invoice later than the timeframe specified, it is the discretion of the seller to either reject or accept the e-invoice access.

Methods For Suppliers for Issuing e-invoice to Buyers

Here is an overview of some of the methods suppliers can use to issue e-invoices to Buyers, be it on the spot or post-transaction.

There are four key scenarios to demonstrate the application of e-invoice –

  1. Online platform (Retailer Web Portal/ Mobile App)

The Retailer can integrate his Web Portal/ Mobile App with the IRBM MyInvois System to generate and validate the e-invoice upon request.

  1. Retailers’ Point-of-sale (POS) system

The Retailer can integrate his POS system with the IRBM MyInvois System to generate e-invoices in real time. Buyers must provide their details to the Retailer (Supplier) at the point of purchase to generate the e-invoice upon request.

Read more:- E-invoice integration in Malaysia

  1. MyInvois Mobile App

Retailers without a Retailer App or POS system can use the MyInvois Mobile App to issue e-invoices to Buyers upon request. Retailers (Suppliers) will have to input the details required to issue an e-invoice.

  1. Post-Transaction Request via Online Platform (Retailer Web Portal/ Mobile App)

Buyers who did not request an e-invoice at the point of purchase can still request one through the Web Portal or Mobile App developed by the Retailers (Suppliers). A right e-invoicing software in Malaysia also gives access to this app.

Methods For Suppliers for Issuing e-invoice to Buyers

Final Thoughts – Embracing the Future of Transactions

As Malaysia steps into the future with the adoption of e-invoicing, businesses, consumers and those involved in Cross-Border Trade in Malaysia alike stand to benefit from the e-invoicing mandate in Malaysia. Imagine a world where paper receipts are a thing of the past and where you record and validate your every transaction with just a few clicks. The MyInvois portal isn’t just an e-invoicing compliance tool; it’s a gateway to a smarter, more connected way of doing business.

For suppliers, this e-invoice transition in Malaysia means less paperwork and more time to focus on what they do best -serving their customers. For buyers, it means quick and easy access to proof of purchase and expense validation. And for everyone, it signifies a move towards a more sustainable and technologically advanced Malaysia. This opens the door to using high-tech solutions of e-invoicing software that makes the jobs of both parties easier and more streamlined.

So, whether you’re a supplier preparing for the shift or a buyer curious about what this means for you, embrace the change. The future of transactions is here, and it’s digital, efficient, and designed to make life easier for everyone involved.