Know All About Peppol Integration and Details of MY-PINT

The world has become digital, and so have transactional processes across industries and verticals. This digitization uproar comes with the need for a more interoperable network that supports global trade. So, with it came the inception of Peppol (“Pan-European Public Procurement On-Line”) and since the Peppol integration model has become the largest e-invoicing network in the world.

The European Commision developed the Peppol network with a sole agenda – to make the process and format of documentation and reporting of business transaction whether local or global universal.

Today, the Peppol framework has become a global standard for creating and validating e-invoices across 35 countries. The Malaysian authority MDEC has also integrated its system with the Peppol network, giving the taxpayers an option to adopt e-invoicing via an easier and more unified method.

What is Peppol ?

Peppol is a network that lets businesses across the world transfer electronic documents just like e-invoices with each other. It connects businesses and public administrations via Access Points.

Peppol integration ensures interoperability and standardization in e-procurement and e-invoicing, making cross-border trade more efficient and less complicated.

Basically, Peppol works on a set of specifications and set formats that applies across the countries. This facilitates uniformity while e-procurement, e-documentation and e-invoicing.

Types of Documents in Peppol Integration

The following are the different documents that can be exchanged via Peppol:

• E-Invoices
• Electronic orders exchange
• Orders confirmation
• Catalogue goods
• Shipping documents
• Exchange timecards
• Invoice responses

History of Peppol

Peppol Network was developed by the European Commission in 2008. It was formed with efforts to enhance cross-border e-procurement within Europe initially.

It was after the success of Peppol framework in 30 European countries that in 2012, the project transitioned to an operational phase under the governance of Open Peppol, a non-profit international association.

Open Peppol took over the management and further development of Peppol integration specifications and network.

How To Be Peppol Ready in Malaysia?

The Malaysian specification adapts the Peppol BIS (Business Interoperability Specifications) billing format for use in the country, aligning with local business and tax regulations. It is based on the Peppol International Invoice (PINT) framework.

The main differentiator between Malaysia’s Peppol integration adoption and others is the presence of Sales and Service Tax (SST) rather than Value Added Tax (VAT).

To promote the adoption of e-Invoicing among businesses, MDEC has been designated as Malaysia’s Peppol Authority. This role involves accrediting Peppol service providers and Peppol-ready solution providers. They define local requirements and technical standards, to ensure compliance with the Malaysian Peppol framework.

Formats Accepted by MDEC Peppol

MY-Peppol Invoice (MY-PINT) refers to the Malaysian adaptation of the Peppol International Invoice (PINT) framework. It is designed to align with Malaysia’s specific business practices and tax requirements while utilizing the Peppol network for electronic invoicing.

MY-PINT integration ensures that invoices exchanged within Malaysia through the Peppol network comply with local regulations, including those related to Sales and Service Tax (SST), and are formatted according to the OASIS UBL 2.1 XML standard. This adaptation facilitates seamless electronic invoicing and enhances efficiency in business transactions across Malaysia.

What is Peppol ID

For any organization, taxpayer or a business wanting to create e-invoices via Peppol network needs to have a unique identifier. This identifier is called Peppol ID and is always unique to each user. This ID helps the users to create, send and receive e-invoices in Peppol format.

Integration of MY-PINT in Malaysia’s E-Invoicing Model

As Malaysia moves towards digital invoicing, it’s necessary to map the Universal Business Language (UBL) fields with those used by IRBM/LHDNM (Inland Revenue Board of Malaysia). This is important to match these fields while integrating MY-PINT with the country’s E-Invoicing model.

1. Consistent UBL Syntax Fields

In integrating MY-PINT, there are 24 fields where the UBL syntax between MY-PINT and IRBM/LHDNM aligns. This alignment is crucial as it ensures consistency and seamless data exchange between the systems. The matching fields facilitate straightforward interoperability, minimizing the need for additional data transformations.

2. Divergent UBL Syntax Fields

However, the comparison also revealed 43 fields where the UBL syntax differs between MY-PINT network and IRBM/LHDNM. These differences pose a challenge, requiring meticulous data transformation and validation processes. To achieve compliance with both the Peppol network standards and IRBM/LHDNM regulations, it is essential to address these discrepancies effectively. Ensuring accurate data exchange in these fields is vital for maintaining the integrity and reliability of the e-invoicing Peppol.

Understanding Invoice Functionality in Peppol BIS

An invoice serves multiple purposes, supporting various internal business processes. There are essential processes and information an invoice should support within the Peppol BIS framework. Here are the details that an invoice must accommodate the following essential functions –

1. Accounting

One of the primary purposes of an invoice is to record business transactions in an organization’s financial accounts. Following best practices in financial accounting and tax regulations, every taxable entity must maintain detailed accounts for tax application and verification by authorities.

Thus, an invoice should include detailed information at both the document and line levels to facilitate accurate bookkeeping on the debit and credit sides.

2. Invoice Verification

Invoice verification is a critical function that ensures the authenticity of commercial transactions. This process is part of the buyer’s internal business controls. An invoice should reference relevant documents such as purchase orders, contracts, tenders, and delivery information as per the Peppol integration guidelines.

It must also provide enough details to transfer the invoice to the appropriate authority or department for verification and approval.

3. Auditing

Auditing, whether internal or external, ensures that accounting has been performed correctly. Unlike regular accounting, auditing is a separate review process. An invoice supporting the auditing process must include information to verify the authenticity and integrity of the transaction.

This includes identifying the buyer and seller, detailing the traded products and services, linking the invoice to its payment, and connecting it to related documents like contracts and purchase orders.

4. Tax Reporting

Invoices play a crucial role in tax reporting, carrying tax-related information from the seller to the buyer. They must enable both parties to handle tax booking and reporting accurately. An invoice should provide sufficient details to determine the tax regime and calculate and describe the tax according to relevant legislation.

5. Payment

Invoices represent a claim for payment and can be issued either before or after payment. If issued before payment, an invoice requests the buyer to make the payment, providing necessary details for initiating the transfer. If issued after payment, such as in credit card purchases, the invoice includes payment information to facilitate reconciliation.

Invoices must identify the means of payment and state the requested payment amount clearly. They should support various payment methods, including credit transfers, direct debits, and payment cards.

Credit Notes and Negative Invoices

Reversing an issued invoice can be done via a credit note or a negative invoice. A credit note, indicated by document type code ‘381’, uses amounts with the same sign as the original invoice but is booked in reverse.

A negative invoice, with document type code ‘380’, uses amounts with opposite signs to the original invoice. Both methods effectively cancel out the original invoice amounts, ensuring accurate financial records.

Bridging Borders with Technology – Peppol-Registered Platform, Complyrobo

The Peppol framework, with its standardized approach to e-invoicing and e-procurement, provides a robust foundation for global trade. Malaysia’s adoption of Peppol, tailored to its unique tax regulations through MY-PINT network, demonstrates the country’s commitment to modernizing its digital economy.

As you get ready to adopt the Peppol network for smooth e-invoicing software like Complyrobo could prove to be an excellent tool for navigating the complexities of e-invoicing. Being a Peppol-registered platform, we adapt to all the technical requirements of Peppol integration while being compliant with local regulations.

All you need to do is to integrate your local or centralized system with our API, and we will make you e-invoicing ready within weeks. Leveraging our advanced technology is the easiest way to onboard the Peppol e-invoicing system without any hassles.