With the advancement of technology and the evolution of the times, the government has decided to implement electronic invoices based on the various income categories of taxpayers starting from 2024, and fully implement them on July 1, 2025. This means that the era of electronic invoices is imminent, which will also have a significant impact on entrepreneurs.

First and foremost, e-Invoices will affect various aspects of business operations, finance, and tax management. Businesses need to make appropriate adjustments to their existing business processes to ensure smooth operations. This is a challenging task for many small and medium-sized enterprise owners. This article will explore 5 common questions (FAQs) and concerns that businesses may encounter when using e-Invoices, providing corresponding answers.

1. What are electronic invoices? Are they just invoices converted to PDF format? 

Although electronic invoices cover roughly the same information as traditional invoices, such as basic details of the supplier and buyer, product descriptions, prices, quantities, etc., electronic invoices are fundamentally different from traditional invoices.

e-Invoices are not simply paper invoices converted to PDF format; they need to be created in accordance with the formats specified by the Inland Revenue Board. In addition, the issued e-Invoices will be transmitted to the system of the Inland Revenue Board for verification and storage.

2. Are all businesses required to implement e-Invoices? What is the implementation schedule?

All businesses must implement electronic invoices based on their annual turnover or income threshold. The annual turnover or income threshold refers to the turnover or income value specified in the audited financial statements for 2022 or the tax return form for the taxation year 2022, as follows:

• August 1, 2024: Companies with annual turnover exceeding 100 million Malaysian Ringgit.
• January 1, 2025: Companies with annual turnover exceeding 25 million to 100 million Malaysian Ringgit.
• July 1, 2025: Mandatory implementation for all taxpayers, including new businesses that started operations from 2023.

However, the government also accepts voluntary early implementation of electronic invoices by taxpayers, regardless of their annual turnover or income threshold.

3. Can suppliers issue traditional invoices to customers in their daily operations and only submit e-Invoices to IRB for validation at the end of the month?
As long as customers do not require suppliers to provide electronic invoices, suppliers can choose to issue traditional invoices to customers in their daily operations and integrate the traditional documents and invoices issued in the previous month within seven days after the end of the month to issue a consolidated e-invoice as proof of their income transactions. On the contrary, if customers request suppliers to provide electronic invoices, suppliers must issue the corresponding electronic invoices to customers.

In addition, IRB has also indicated that certain specific industries and activities require electronic invoices to be issued for each transaction. This also means that consolidated electronic invoices are not permitted. These include the automotive industry, aviation industry, luxury goods and jewelry, construction industry, wholesalers and retailers of construction materials, licensed gambling and betting businesses, and payments to agents, distributors, or dealers.

4. What if there are errors in the e-Invoice?
If suppliers discover errors on invoices already sent to customers, customers can request to reject the invoice within 72 hours, and if suppliers agree to this request, suppliers can cancel the invoice within this 72-hour period.

However, once the 72-hour deadline has passed, any adjustments will require the issuance of new invoices, debit notes, credit notes, or refund notes.

5. How can I tell if an invoice has been validated?

Adoption to e-Invoicing can be made easier, join our online Free Webinar “Tax Savvy Boss: e-invoicing Tactics Revealed” by Datin Shin. 
 

Webinar Details:
Date: 08 March 2024 (Friday)
Time：2:00PM - 4:30PM
Speaker: Datin Yap Shin Siang, YYC Group CEO & Finance Expert
Fee: Free
Platform: Zoom

Not only sharing information about e-invoicing, Datin Shin will also provide details about the Special Voluntary Disclosure Programme (SVDP) 2.0. Grab your last chance to participate in this program to declare unreported or underreported income from previous years without incurring any penalties.