Understanding E-Invoicing and Its Impact on Your Business
🔹 What is E-Invoice?
E-Invoicing, or electronic invoicing, is a digital method of generating, sending, receiving, and processing invoices. It eliminates the need for paper-based invoices and ensures a more efficient, transparent, and automated invoicing system. With Malaysia’s push towards digital transformation, businesses are required to adopt e-invoicing in phases based on their annual revenue.
Current Receipt
A current receipt can be a paper copy or a PDF that is often printed or sent via email. Since it is not verified by LHDNM, it lacks official validation, making manual verification necessary for tax compliance. Physical receipts can be lost, damaged, or altered, posing risks of fraud and inefficiencies in record-keeping. Retrieving past receipts is cumbersome, especially when dealing with physical copies, increasing administrative burdens for businesses.
E-invoice
An E-Invoice is a digital receipt verified by LHDNM, ensuring authenticity, security, and compliance. Unlike traditional receipts, it is stored safely online, reducing the risk of loss or damage. It automates record-keeping, simplifies audits, and integrates seamlessly with accounting systems, making financial transactions more reliable and efficient.
Sample Display of E-invoice verified by LHDN
E-Invoice Implementation Timeline
| Targeted Taxpayers | Implementation Date |
|---|---|
|
Annual Revenue Above RM100 Million |
1 October 2024 |
|
Annual Revenue RM25M to RM100M |
1 January 2025 |
|
Annual Revenue RM500,000 to RM25M |
1 July 2025 |
|
Annual Revenue RM150,000 to RM500K |
1 January 2026 |
|
Small businesses that hit the RM150,000 threshold |
Must comply starting from 1 January of the second year after reaching the threshold. |
Typical Workflow of e-Invoices in Malaysia
The e-invoicing process in Malaysia follows a structured workflow to ensure compliance and efficiency. It begins with a sale transaction, after which an e-invoice is generated and submitted to the Inland Revenue Board of Malaysia (IRBM) for verification. The IRBM validates the e-invoice, ensuring its authenticity before notifying both the supplier and buyer. The verified e-invoice is then shared with the buyer and stored in IRBM’s database, ensuring secure record-keeping. This digital process enhances tax compliance, reduces fraud, and simplifies financial management for businesses.
Comparison Between Transaction-by-transaction E-Invoicing and Consolidated E-Invoicing
Transaction-by-transaction E-invoice
Transaction-by-transaction e-invoicing requires businesses to generate and submit invoices to LHDN in real time for each transaction. This method ensures immediate validation and compliance and is suitable for businesses with small to medium transaction volumes, such as professional services or contract sales. Additionally, this method keeps a separate record for each transaction, simplifying the audit trail.
Consolidated E-invoices
Consolidated invoices allow businesses to combine multiple transactions over a specific time period (e.g., daily, weekly, or monthly) into a single invoice for submission to LHDN.This method reduces the frequency of invoice submissions and is ideal for businesses with high transaction volumes, such as retail or subscription services. However, proper reconciliation is required to ensure accurate reporting and compliance.
Self-Billed e-Invoice
A self-billed e-Invoice is issued by the buyer instead of the seller in specific transactions, such as payments to individuals not conducting a business, foreign suppliers, agents, or e-commerce transactions. It ensures compliance with tax regulations and proper documentation for tax reporting. Certain interest payments, such as those made by financial institutions to the public or between related companies in Malaysia, are exempt from self-billing requirements.
Transactions Requiring Self-Billed e-Invoices
- Transactions with individuals who are not conducting a business.
- Goods sold or services rendered by foreign suppliers (import).
- Payments to agents, dealers, and distributors.
- Local e-commerce transactions.
- Payouts to all betting and gaming winners.
- Profit distribution, such as dividend distribution.
Interest Payment Exceptions
- Interest payments made by businesses (e.g., financial institutions) charging interest to the public.
- Interest payments made by employees to their employers.
- Interest payments made by foreign payers to Malaysian taxpayers.
- Interest payments to a related company incorporated in Malaysia that provides centralized treasury services.
- Late payment interest or charges imposed by Malaysian entities.
Self-billed e-invoices are also required for specific financial transactions, including:
- Insurance-related claims and compensation issued by insurance companies.
- Payments related to capital transactions, such as capital reduction, share/unit redemption, share buybacks, return of capital, or liquidation proceeds.
Sample self-billed E-invoice verified by LHDN
Benefits of E-Invoicing
Regulatory Compliance
Ensures businesses adhere to LHDN e-invoice regulations, reducing tax risks and penalties.
Faster Payment Processing
Speeds up transaction approvals, improving cash flow and reducing delays.
Cost Savings
Eliminates expenses related to paper invoices, printing, and manual processing.
Fraud Prevention & Security
Verified digital invoices prevent tampering and unauthorized alterations.
Automated Record-Keeping
Provides secure, easily accessible records for audits and tax filing.
Watch How AutoCount Makes e-Invoicing Easy
In this video, learn how AutoCount can help your business generate and manage e-Invoices seamlessly, ensuring compliance with the LHDN’s requirements.
🔹 What you get when you choose AutoCount E-invoice
Intelligent Onboarding Link
Customers and suppliers may quickly enter or update their information, including TIN numbers and company information, which simplifies data collecting.
Invoice Verification
An approver can verify invoice details before submission to LHDN, ensuring errors are rectified beforehand.
LHDN MyInvois System Downtime Handling
If the system is down, uploaded invoices will be queued and automatically resubmitted until they are verified.
Automation of e-Invoice Processing
AutoCount’s e-Invoice Solution automates the creation and submission of consolidated and self-billed e-Invoices.
AutoCount e-Invoice Solutions: Streamlining Invoicing for Businesses
AutoCount Standard e-Invoice
- Generate e-Invoices using AutoCount Accounting or Cloud Accounting.
- Upload e-Invoices to the AutoCount e-Invoice Platform (AIP) for submission to the LHDN MyInvois system.
AutoCount Consolidated e-Invoice
- Businesses in retail and F&B can generate consolidated LHDN-compliant e-Invoices for B2C transactions and upload them directly from AutoCount POS.
- Business owners with multiple stores can consolidate e-Invoices from different outlets using a POS solution while complying with LHDN regulations.
- Customers can scan a QR code on receipts and enter their details to request an e-Invoice, simplifying the process.
- Once customers submit their details, AutoCount AIP generates the e-Invoice.
AutoCount Self-Billed e-Invoice
- Self-billed e-Invoices are useful for businesses involved in high-volume activities, such as international procurement or paying commissions to agents, dealers, or distributors.
- AutoCount e-Invoice solution automates the transfer of details from purchase invoices and payment vouchers to self-billed e-Invoices, reducing manual entry and saving time.
E-invoice Training Schedule
Free E-Invoice Training
Date: 26 March 2025 (Wednesday)
Time: 9.30 AM – 12:30 PM
Platform: Google Meet
Contact: 013 777 6825 or
inquiry@autocountjb.com
Free E-Invoice Training
Date: 26 March 2025 (Wednesday)
Time: 2.00 PM – 5.00 PM
Platform: Google Meet
Contact: 013 777 6825 or
inquiry@autocountjb.com
Free E-Invoice Training
Date: 28 March 2025 (Friday)
Time: 9.30 AM – 12:30 PM
Platform: Google Meet
Contact: 013 777 6825 or
inquiry@autocountjb.com
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🔹 Take Action Now!
Switching to AutoCount E-Invoice is the smartest move for your business. It’s easy to use, tax-compliant, and saves you time.
🚀 Get started today and simplify your invoicing process!