Running a business is no easy feat, and it becomes even more challenging with the introduction of e-Invoicing. Despite the potential benefits, most businesses still believe that the introduction of e-Invoicing would increase the complexity of the billing processes and make overall business operations more complicated. As such, the Inland Revenue Board of Malaysia (IRBM) has released several FAQs to address the common issues faced by taxpayers from different industries. In this article, we specifically highlight some common  
e-Invoicing issues that may be encountered by taxpayers in the telecommunication industry.    

• Adjustments in relation to the previous bill/ statement issued to the customers 
  In the telecommunication sector, billing errors are one of the commonly faced issues. It is common for telecommunication service providers to impose incorrect charges by mistake. Upon implementation of e-Invoicing, what should a telecommunication service provider do to rectify the billing errors?
  
  Based on the current business practices, telecommunication service providers will reflect the adjustment in the next cycle bill/statement. According to the FAQs, the telecommunication service provider is allowed to apply the same business practices adopted currently. Alternatively, adjustments could be made by issuance of e-Invoice credit note/ debit note/ refund note. 
   
• Issuance of invoices to intermediaries such as agents or trading companies  
  Many telecommunication service providers sell prepaid plans to intermediaries, such as agents or trading companies. These intermediaries, in turn, would then resell the prepaid plans to end consumers. So, in the e-Invoicing era, how should telecommunications service providers document these transactions?
  
  Currently, the telecommunication service providers will issue normal invoices to agents or trading companies for the sale of prepaid plans. Upon implementation of e-Invoicing, the telecommunication service providers are required to issue e-Invoices as proof of income for tax purposes.  
   
• Recognition of rental expenses incurred by telecommunication service providers  
  Telecommunication service providers often operate their business in rented premises owned by individuals and/or companies. With the implementation of e-Invoice, how should the telecommunication service provider recognise the rental expenses incurred?  
  
  In situations where the landlord is an individual who is conducting a business (e.g. sole proprietorship) or a company, the landlord is required to issue an e-Invoice to the tenant (telecommunication service provider) as proof of income for tax purposes. On the other hand, the telecommunication service providers will receive the e-Invoice as proof of expense for tax purposes.  
  
  However, in situations where the landlord is an individual who is not conducting a business, the tenant (telecommunication service provider) is required to assume the role of the issuer and issue a self-billed e-Invoice to substantiate the expenses for tax purposes.   

Do you have any doubts regarding e-Invoicing and its implementation? No worries, we have compiled some Frequently Asked Questions (FAQs) for your reference. For more information, subscribe to TaxPOD now to access decades of tax-saving knowledge at your convenience, anytime and anywhere.

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