Malaysia

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About
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Regulated by the Royal Malaysian Customs Department (RMCD). Aims to modernize tax reporting, enhance transparency, and ensure tax compliance in line with regional initiatives.

Implementation of mandatory e-invoicing in Malaysia

Malaysia e-invoicing Malaysia is introducing a phased e-invoicing system under the supervision of LHDN (Inland Revenue Board). The goal is to improve tax transparency and streamline digital reporting.
  • 2024: A pilot program launched for selected companies. Participants issue e-invoices in real time using the national platform and share invoice data with LHDN.
  • 2025: Mandatory adoption begins, starting with companies earning over RM 100 million. Requirements include invoice validation via the government portal and structured digital formats.
  • 2027: E-invoicing will be required for all taxpayers, including individuals and small businesses.

Who needs e-invoices in Malaysia?

E-invoicing in Malaysia is expected to be mandatory for:
  • Large Enterprises: Early adoption through pilot programs.
  • VAT-Registered Businesses: Required to comply under the new framework.
  • Exporters: Must issue e-invoices for cross-border transactions.
  • Non-Resident Businesses: Required for transactions with VAT obligations in Malaysia.
Ready to simplify e-invoicing and scale with confidence? Request a fee quote and discover a personalized solution that adapts to your workflow, supports PEPPOL and national systems, and grows with your business.

E-Invoicing vs. E-Billing

Aspect E-Invoicing E-Billing
Purpose Compliance with RMCD regulations Informal or customerfocused transactions
Format Standardized XML via certified platforms Flexible, non-regulated formats
Usage Mandatory for taxable transactions Optional for internal use
 

Key features of Malaysia’s e-invoicing System

Malaysia’s e-invoicing system will involve:
  • Submission Platforms: Businesses must submit invoices via certified platforms in XML format.
  • Validation: RMCD validates compliance and assigns a unique Invoice Reference Number (IRN).
  • Archiving: E-invoices must be stored electronically for 7 years under Malaysian tax laws.

E-Invoicing dataset

E-invoices in Malaysia are expected to include the following critical data:
  • Buyer/Seller IDs: Taxpayer identification numbers.
  • Invoice Details: Invoice number, issue date, and payment terms.
  • Goods and Services: Descriptions, quantities, unit prices, and VAT/GST details.
  • Taxes: Applicable VAT or GST rates and amounts.
  • Transaction Info: Total amount payable, currency, and payment method.
  • Digital Signature: Ensures authenticity and data integrity.

E-invoicing across transaction types

B2B Transactions;
  • Mandatory to ensure compliance with VAT regulations.
  • Streamlines cross-border transactions and VAT refunds.
B2C Transactions:
  • Not yet mandatory but encouraged for transparency and process optimization.
B2G Transactions:
  • Required for government-related transactions to ensure compliance and transparency.

Penalties for non-compliance

Non-compliance with Malaysia’s e-invoicing regulations may result in:
  • Fines: Monetary penalties for failure to issue or report e-invoices correctly.
  • Operational Challenges: Rejected invoices can disrupt payments and business operations.
  • Legal Risks: Risk of audits and reputational damage for repeated violations.
Stay ahead of the e-invoicing regulations with our easy-to-use platform. Book a free demo today and see how we can help you streamline your invoicing process while ensuring full compliance with Malaysia's e-invoicing laws.
April 15, 2025 265
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