Malaysia e-Invoicing FAQs: Everything You Need to Know (2024 Updated)

The mandatory implementation of e-invoicing in Malaysia has been in effect since 1st August 2024. While the Inland Revenue Board of Malaysia (IRBM) has released detailed e-invoicing guidelines, businesses may still have questions or concerns. 

To address these, this article provides a comprehensive list of Frequently Asked Questions (FAQs) and their corresponding answers.

FAQs on e-invoice basics

What is an e-invoice?

An e-invoice is a digital record of a transactional exchange between a seller (supplier) and a purchaser (buyer), which goes through the government portal for validation and recordkeeping.
E-Invoice contains all the details of an invoice along with a Unique Identification Number (UIN), which is generated by the government system after proper verification of the core fields like TIN, MCIR, etc. and QR code, which enables online validation of the e-invoice.

What transactions are covered under e-invoicing?

e-Invoicing in Malaysia covers transactions such as Business to Business (B2B), Business to Customer (B2C), and Business to Government (B2G).

What documents are covered under e-invoices?

Invoices, credit notes, debit notes and refund notes fall under the scope of Malaysia e-invoice.

Is e-invoice applicable only to domestic transactions in Malaysia?

No, e-invoice applies to both domestic and international transactions.

From when should I generate e-invoices?

The IRBM planned to introduce mandatory e-invoicing in phases based on company turnover. Initially, the implementation was set to start on June 1, 2024, but it has been postponed to August 1, 2024, as announced in Malaysia Budget 2024. Here is the updated timeline:

What e-invoice file formats does IRBM accept for validation purposes?

IRBM accepts e-invoices in XML or JSON file formats, as specified in their guidelines.

What incentives are available for taxpayers to adopt e-invoices?

The Malaysian government has introduced tax incentives and grants related to e-invoice implementation in Budget 2024. This includes a tax deduction of up to RM50,000 per year of assessment for expenditures on environmental, social, and governance initiatives, including consultation fees for e-invoice implementation by Micro, Small, and Medium Enterprises (MSMEs). These incentives are effective from the year of assessment 2024 to 2027.

What are the penalties for failing to issue an e-invoice?

Failing to issue an e-invoice is considered an offence under Section 120(1)(d) of the Income Tax Act 1967. The penalty for non-compliance includes a fine ranging from RM200 to RM20,000, or imprisonment for up to 6 months, or both, for each instance of non-compliance.

Has there been any change to the mandatory implementation date for taxpayers with an annual turnover exceeding RM100 million due to the Income Tax (Issuance of Electronic Invoice) Rules 2024?
No, the implementation date remains unchanged. The rules, effective from 1 October 2024, require taxpayers with an annual turnover exceeding RM100 million to comply by that date. Enforcement actions for non-compliance will begin from 1 October 2024.

FAQs on the e-Invoice process

What transmission methods are available for sending e-invoices?

IRBM offers two transmission methods for e-invoices: 

1. Through the MyInvois Portal provided by IRBM; and 

2. Application Programming Interface (API). 

Taxpayers can utilize either or both methods to transmit e-invoices, ensuring no duplication occurs.

What data is to be provided in an e-invoice?

To issue an e-invoice, it is necessary to provide 55 data fields, out of which 37 are mandatory and 18 are optional, categorized into eight groups: Address, Business Details, Contact Number, Invoice Details, Parties, Party Details, Payment Info, and Products/Services. 
Additionally, specific circumstances may necessitate submitting an annex with 17 additional details to IRBM.

A seller shall issue an e-invoice with 34 mandatory fields and an additional 17 fields based on specific conditions.

Is it mandatory to provide data in e-invoice annexures? 

If you raise an e-invoice for certain transactions such as export, import, etc., you must mention the 17 fields 

Can I cancel the invoice submitted to IRBM?

Yes, the seller can cancel the e-invoice within 72 hours from generation time.

Shall I issue an e-invoice for disbursements and reimbursements?

You must generate e-invoices for disbursements and reimbursements when you meet certain conditions.

Can I edit an e-invoice on MyInvois Portal after IRBM validates the e-invoice?

No, the seller should cancel the e-invoice and reissue a new e-invoice.

Does the invoice number change once IRBM validates it?

No, there will be no change in the invoice number. However, the seller will get an e-invoice with a Unique Identifier Number once IRBM validates and clears the invoice.

Is there any specific application required to scan the QR code?

No, you can use any device, such as a mobile camera or a QR code scanner. 

What does the e-invoice QR code contain?

QR code gives you a link to the validated e-invoice. Further, you can use the link to access the e-invoice via the Myinvois portal.

What e-invoice model will be adopted?

IRBM is developing the Continuous Transaction Control (CTC) Model to validate e-invoices instantly or near-instantly.

Is my invoice data secure when I use an API solution to generate e-invoice?

Yes, API solutions are equipped with network and security monitoring tools and ensure data security and privacy.

Is there a grace period for cancelling an e-invoice submitted to IRBM?

Yes, suppliers have a 72-hour window to cancel an e-invoice after submission.

Is an e-invoice necessary for refunding money to buyers?

Yes, a refund note e-invoice is required for returning money to buyers, except in cases of:

1. Incorrect payments by buyers
2. Overpayments by buyers
3. Return of security deposits

Can information in the MyInvois Portal be edited after IRBM validates the e-invoice?

No, after validation, the supplier must cancel the e-invoice within 72 hours and issue a new e-invoice for any changes. Changes made after 72 hours require issuing a new e-invoice (debit note, credit note, refund note) to adjust the original.

How quickly does IRBM validate an e-invoice?

IRBM validates e-invoices in near real-time, typically within two (2) seconds.

What is the timeframe for issuing e-invoice adjustments (debit notes, credit notes, refund notes) after the 72-hour validation period?

There is no specific timeframe. Suppliers can issue e-invoice adjustments according to their company policy. For foreign suppliers and buyers not using MyInvois System, adjustments are made via debit notes, credit notes, or refund note e-invoices.

Can taxpayers issue a single credit note e-invoice to adjust multiple original e-invoices?

Yes, taxpayers can adjust multiple original e-invoices with a single credit note, debit note, or refund note e-invoice. The IRBM Unique Identifier Number for each original e-invoice must be included in the 'Original e-invoice Reference Number' field.

Does IRBM provide a standard template for sharing validated e-invoices with buyers?

Taxpayers may adopt any format for the visual representation of the e-invoice, provided the QR code is embedded correctly, as per current practice.

Is it mandatory to share the validated e-invoice or its visual representation with the buyer?

Acknowledging practical challenges, IRBM allows taxpayers to share either the validated e-invoice (XML/JSON file) or a visual representation of it, or both, until further notice.

FAQs on Malaysia e-invoice authority

Who is the e-invoice authority in Malaysia?

The Inland Revenue Board of Malaysia (IRBM) is the authority for e-invoice activities.

What is the e-Invoice Malaysia helpline number?

You can contact the e-Invoice HASiL Help Desk at 03-8682 8000. The help desk operates 24 hours a day, seven days a week.

When can I contact the e-Invoice Malaysia Help Centre?

The e-Invoice HASiL Help Desk is available 24/7. You can call them at 03-8682 8000 anytime, from Monday to Sunday.

How can I connect to Malaysia's e-invoicing helpdesk?

You have several options to connect with the e-Invoice helpdesk:

• Email your query to myinvois@hasil.gov.my.
• Use the feedback form at this link.
• Call the e-Invoice HASiL Help Desk at 03-8682 8000, which is operational 24/7.
• Chat with the IRBM help chatbot.

Will IRBM provide any technical guidance on system integration?

The IRM will tentatively release the SDK and technical guidelines in November 2023.

Will IRBM conduct any engagement sessions?

IRBM is conducting engagement sessions with professional bodies, tax practitioners and identified stakeholders to guide them towards implementing e-invoicing in Malaysia.

Who should we reach out to if there are queries or concerns?

Please raise any queries or concerns to myinvois@hasil.gov.my.

What security measures would IRBM adopt to ensure taxpayer invoice data is safe in the e-invoicing journey?

LHDNM will ensure that MyInvois System is in compliance and certified with ISO/IEC 27001 Information Security Management System (ISMS) and ISO 22301 Business Continuity Management System (BCMS) Audit Certification.

When is e-Invoicing mandatory in Malaysia?

It is mandatory from 1st August 2024 for a specified class of taxpayers whose turnover crosses the specified limit of RM 100 Million. However, on a voluntary basis, it can start issuing e-Invoice from 1st January 2024.

Who is responsible for issuing e-Invoices?

The supplier of the transaction is responsible for issuing an e-Invoice. However, in certain cases, the buyer self generates the e-invoice also known as “Self-billed e-invoice”. Self-billed e-invoice is required for various transactions, including payments to agents, foreign suppliers' sales, profit distribution, e-commerce, betting and gaming payouts, and acquisitions from individual taxpayers, as outlined in specific guidelines.

How do I create and submit e-Invoices?

e-Invoices are created through MyInvois Portal or through e-Invoicing software on the basis of an API. Once that is created, it is sent to IRBM for validation.

Can I save e-Invoices as drafts before finalizing?

Yes. The taxpayer can create e-Invoices in a draft mode with validation and finalization to be done after that.

MSME Related FAQ’s

Are MSMEs required to issue e-invoices?

Yes, all businesses must implement e-invoices according to specified timelines. However, businesses with turnover below RM150,000 are exempt.

Does the exemption apply to all MSMEs?

The exemption applies to businesses with turnover below RM150,000, except:

• Businesses with shareholders whose turnover exceeds RM150,000.
• Subsidiaries of companies with turnover exceeding RM150,000.
• Businesses with related companies or joint ventures above RM150,000.

When must MSMEs implement e-invoices if their turnover exceeds RM150,000?

MSMEs exceeding RM150,000 must implement e-invoicing from 1 January of the second year after surpassing the threshold.

How is the requirement for e-invoice implementation determined for MSMEs?

The requirement is based on:

• Audited financial statements showing turnover above RM150,000.
• Annual revenue reported in the tax return.
• Turnover exceeding RM150,000 in a given year.

How is the turnover threshold calculated for sole proprietorships with multiple businesses?

The total turnover across all businesses is considered. If combined turnover exceeds RM150,000, e-invoicing is required.

Can an MSME be exempt from e-invoicing again if its turnover falls below RM150,000 in subsequent years?

No. Once mandated to implement e-invoices, exemptions won't apply even if turnover later falls below RM150,000.

Are exempted businesses required to issue consolidated e-invoices and self-billed e-invoices?

No. Exempt businesses are not required to issue consolidated or self-billed e-invoices, though voluntary adoption is encouraged.

If an MSME sells goods through an e-commerce platform, are they obligated to provide transaction details for e-invoice issuance?

Yes, the e-commerce platform provider is responsible for issuing e-invoices or self-billed e-invoices for transactions.

If an MSME sells goods both through a physical store and an e-commerce platform, must it issue e-invoices for both?

MSMEs must issue e-invoices for physical store transactions. For e-commerce transactions, the platform provider is responsible for issuing e-invoices.

FAQ’s on Cross Border Transactions and Foreign Supplier/ Buyer

When should a Malaysian buyer issue a self-billed e-invoice for goods purchased under one foreign supplier's invoice but imported via multiple shipments?

If multiple shipments are cleared under a single invoice, the buyer must issue a self-billed e-invoice based on the invoice and customs clearance date.

• If the invoice is issued before the first shipment clearance, issue a self-billed e-invoice by the end of the month after the first shipment's clearance date, including the customs form reference number. No additional e-invoices are needed for later shipments.
• If the invoice is issued after the first shipment, a self-billed e-invoice is needed for each shipment, based on customs value. A final e-invoice is issued upon receiving the foreign supplier's invoice.
• If the invoice is issued after the final shipment, issue self-billed e-invoices for each shipment and a final one to reconcile discrepancies.

If I purchase goods from a bonded warehouse or Free Zone, do I need to include the customs form reference number in the self-billed e-invoice?

Yes, include the customs form reference number when issuing a self-billed e-invoice for goods delivered from a bonded warehouse or Free Zone.

What are the e-invoice requirements if I am located in a bonded warehouse and sell goods to another Malaysian buyer?

• Issue a self-billed e-invoice for the goods purchased from the foreign supplier (customs form reference optional).
• Issue an e-invoice for goods sold to the Malaysian buyer (customs form reference optional).

If I purchase goods stored in a bonded warehouse or Free Zone and sell them to another Malaysian buyer, how should e-invoices and self-billed e-invoices be issued?

• Issue a self-billed e-invoice for the goods purchased from the foreign supplier (customs form reference optional).
• Issue an e-invoice for the goods sold to the Malaysian buyer (customs form reference optional).

If I instruct a foreign supplier to deliver goods directly to other Malaysian buyers, how should the e-invoice and self-billed e-invoice be issued?

• Issue a self-billed e-invoice for goods purchased from the foreign supplier.
• Issue e-invoices to subsequent Malaysian buyers for goods sold.

If goods are directly drop-shipped from a foreign supplier to a Malaysian buyer, how should e-invoices be handled?

• Issue a self-billed e-invoice for goods purchased from the foreign supplier (customs form reference optional).
• Issue an e-invoice for goods sold to the Malaysian buyer (customs form reference optional).

If goods are delivered directly from a supplier in Malaysia to me, am I required to include the customs form reference number?

Yes, for goods delivered from a Malaysian supplier located in a bonded warehouse or Free Zone, include the customs form reference number in the self-billed e-invoice.

When must a Malaysian supplier issue an e-invoice for goods exported to foreign buyers?

Malaysian suppliers must issue e-invoices following existing invoicing practices. Including the customs form reference number is optional.

For low-value goods declared under the electronic Pre-Alert Manifest (e-PAM) system, what should be entered in the customs form reference field?

For low-value goods under e-PAM, taxpayers are not required to include the e-PAM reference number in the self-billed e-invoice. A self-billed e-invoice is needed when the foreign supplier's invoice is received.

How do taxpayers issue an e-Invoice to a non-TIN holder such as foreign (non-Malaysian) buyers?

Suppliers are required to obtain recipient details from the recipient. Further, in relation to TIN to be input in the e-Invoice, supplier may use “EI00000000020” for foreign buyers.

SDK Related FAQs

How to retrieve and verify company TIN number?

Taxpayers can retrieve their Tax Identification Number (TIN) through three channels:

• Check via the MyTax Portal (e-Daftar menu).
• Contact the HASiL Contact Centre at 03-8911 1000.
• Visit the nearest LHDNM offices.

How to obtain Client ID and Client Secret for Sandbox?

Taxpayers can apply for Client ID & Client Secret for API Sandbox Environment via the MyInvois Customer Feedback Form at feedback.myinvois.hasil.gov.my. Provide:

• Tax Identification Number (TIN) excluding Employer’s (E) No.
• New Business Registration Number.
• Company Name.
• Company Email Address.
• Name of ERP System.

How to submit an e-Invoice in the MyInvois portal? Taxpayers have two options to submit invoices via MyInvois Portal:

• Individual Creation: Fill out a form with all required fields.
• Batch Upload: Upload e-Invoices in batches using a pre-defined Microsoft Excel spreadsheet. Format details will be available on the e-Invois microsite.

What are the various document statuses within the e-Invoice workflow?’

There are 4 major document statuses withing the workflow

1. Submitted (1): Pending additional validations.
2. Valid (2): Successfully validated invoice.
3. Invalid (3): Invoice with validation issues.
4. Cancelled (4): Cancelled by the issuer.

Which login API should be used by the Taxpayer or Intermediary?

Taxpayers use the Login as Taxpayer System for submitting their own documents. Intermediaries, submitting on behalf of customers, use the Login as Intermediary System.

How to validate TIN starting with the number ‘0’?

For validation, remove initial zeros after the TIN prefix. For instance, if the TIN is ‘C01234567890’, validate it as ‘C1234567890’.