What is e-Invoicing ? How electronic invoicing works ?
An e-Invoice is a digital representation of a transaction between a supplier and a buyer. e-Invoice replaces paper or electronic documents such as invoices, credit notes, and debit notes. An e-Invoice contains the same essential information as traditional document, for example, supplier’s and buyer’s details, item description, quantity, price excluding tax, tax, and total amount, which records transaction data for daily business operations.
Benefits of e-Invoice
The implementation of e-Invoice not only provides seamless experience to taxpayers, but also improves business efficiency and increases tax compliance. Overall benefits include:
Overview of e-Invoice
To facilitate taxpayers’ transition to e-Invoice, Taxpayers can select the most suitable mechanism to transmit e-Invoices to LHDNM, based on their specific needs and business requirements.
LHDNM has developed two (2) distinct e-Invoice transmission mechanisms:
a. A portal (MyInvois Portal) hosted by LHDNM
Enables individual generation through a comprehensive form.
The option for batch generation through spreadsheet upload for processing multiple transactions.
Accessible to all taxpayers.
Suitable for micro, small and medium-sized enterprises (MSMEs).
May not be efficient for large volume of data.
Businesses that need to issue e-Invoice but API connection is unavailable.
b. Application Programming Interface (API)
Enables businesses to conveniently transmit high-volume of transactions.
Requires upfront investment in technology and adjustments to existing systems.
API connection may be made directly to LHDNM or through intermediary technology providers.
Ideal for large taxpayers or businesses with substantial transaction volume.
The figure below demonstrates an overview of the e-Invoice workflow from the point a sale is made or transaction undertaken, and an e-Invoice is issued by the supplier via MyInvois Portal or API, up to the point of storing cleared e-Invoices on LHDNM’s database for taxpayers to view their respective historical e-Invoices.
e-Invoice Implementation Timeline
e-Invoice will be implemented in phases to ensure smooth transition. The roll-out of e-Invoice has been planned with careful consideration, taking into account the turnover or revenue thresholds, providing businesses with sufficient time to adapt. Below is the e-Invoice implementation timeline:
|Targeted Taxpayers||Implementation Date|
|Taxpayers with an annual turnover or revenue of more than RM100 million||1 June 2024|
|Taxpayers with an annual turnover or revenue of more than RM50 million and up to RM100 million||1 January 2025|
|Taxpayers with an annual turnover or revenue of more than RM25 million and up to RM50 million||1 January 2026|
|All taxpayers and certain non-business transactions||1 January 2027|
Download e-Invoice Guideline Version 1.0