Implementation of e-Invoice in Malaysia’s for Tourism Industry

The Malaysian government introduced e-invoicing for businesses starting August 1, 2024, initially targeting those with a turnover exceeding RM 100 million. This implementation also includes the Malaysian tourism industry.

The tourism sector faces various operational, billing, and e-invoicing challenges. The Inland Revenue Board of Malaysia (IRBM) has published FAQs tailored to the industry to support service providers during this transition.

These FAQs address a range of billing scenarios relevant to hotels, travel agencies, tour operators, and related services. This blogs would provide clarification for e-invoicing for the tourism sector based on the released FAQ’s.

Scope of e-Invoice in Malaysia for Tourism Industry

Malaysia boasts one of the world's largest tourism sectors, offering diverse services. The industry delivers top-tier hospitality and is increasingly recognised as a medical tourism hub. Given tourism’s significant contribution to tax revenue through tourism tax (TTx) and SST, the implementation of e-invoicing is crucial for combating tax evasion.

Key services within Malaysia's tourism industry include accommodation facilities, transportation services, tour packages, sightseeing activities, travel insurance, booking services, online reservations, and medical tourism. These services are pivotal areas where e-invoicing is important in ensuring transparency and regulatory compliance.

E-invoicing for Tourism Industry: Clarifications based on FAQ

FAQs released by the Inland Revenue Board of Malaysia (IRBM) have issued comprehensive guidelines and frequently asked questions (FAQs). These resources address common scenarios encountered in the tourism sector:

Responsibility for E-Invoice Issuance for Flight Tickets:

• The issuance of e-invoices for flight tickets depends on the contractual relationship between travel agents, third parties, and airline operators.
• If the travel agent acts as the principal (buying tickets from the airline and reselling to consumers), they are responsible for issuing e-invoices. This includes scenarios where flight tickets and non-flight-related products (such as ground tours or visa applications) are sold together.
• When tickets and non-flight products are sold separately, separate e-invoices are required.
• If the airline sells tickets through a travel agent (acting as an agent), the airline operator issues e-invoices directly to consumers.

Details for E-Invoicing of Flight Tickets:

• Individual purchases: The buyer's details should reflect the person who made the purchase or the passenger's details.
• Group bookings: Details can either be of the purchaser for all invoices or individual passengers for respective invoices.

Handling of Tour Packages and Deposits:

• If the security deposit is refundable, no e-invoice is necessary at the deposit collection stage for tour packages that require one.
• Non-refundable deposits require a separate e-invoice. Subsequently, the remaining balance should be invoiced separately.

Invoicing for Tour Guide Services:

• Local tour guides providing services to Malaysian travel agencies must issue e-invoices for their services.
• Foreign tour guides' services require Malaysian travel agencies to issue self-billed e-invoices.

Consolidated E-Invoices for Tour Packages:

• Tour packages that include flight tickets cannot have consolidated e-invoices issued due to regulatory restrictions.
• Packages excluding flight tickets may issue receipts if customers do not request e-invoices. However, a consolidated e-invoice for IRBM validation is permissible within seven days after each month.

Conclusion

Malaysia's tourism industry is one of the most important sectors of its economy. The introduction of e-invoicing brings numerous benefits, including streamlined processes, enhanced transparency, and effective measures to curb tax evasion for the tourism industry.

For further clarification on issuing invoices, businesses should read the detailed e-invoicing guidelines and specific guidelines published by the Inland Revenue Board of Malaysia.