What is E-Invoicing Malaysia?
The e-invoice refers to the soft copy representation of a transaction involving the seller and buyer, respectively, and shall be prepared based on the XML/JSON format prescribed by IRBM. It enables a facility for electronic exchange of invoices; it contains real-time tax reporting, electronic documents and also eradicates the usage of hardcopy paper documents. This system contributes to speeding up the billing and payment processes by making compliance easy to maintain regarding taxes in line with the IRBM guideline with effect from April 2024, the first date of e invoice Malaysia implementation starting from 1st August 2024.
2 methods of submitting e-invoices in Malaysia
Electronic invoice can be submitted via MyInvois Portal and API connection. Let us see their differences together!
What is the E-Invoicing Mandate in Malaysia?
The E-Invoicing Mandate in Malaysia requires all registered businesses to issue electronic invoicing for commercial activities, including B2B, B2G, and B2C transactions. It includes electronic invoice, debit note, and credit note, with penalties for non-compliance. This initiative was targeted at streamlining the invoicing process and increasing compliance among business operations.
Understanding mandate of the E-Invoicing Malaysia
Xero E-invoice Malaysia Implementation Timeline
Implementation of electronic invoicing will be in phases based on business operations’ annual turnover. For the first six months of each phase, simplified compliance requirements will be put in place. This is a kind of relaxation to make things easy for the efficiency transition.
In Xero, during the relaxation period (6 months based on implementation start date)
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Users HAVE TO
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Users ARE NOT REQUIRED TO
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Submit a consolidated e-invoice/s on a monthly basis to IRBM with the total value & tax of all the income activities and transactions.
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Send/receive individual e-invoices, even if the buyer/supplier requests the same.
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Submit a self-billed consolidated e-invoice on a monthly basis to IRBM for all relevant expense activities with total value and taxes.
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Also include the receipt / statement / bill reference in the Consolidated e-Invoice Description field
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The full mandate of e invoice implementation does not apply now for income or annual turnover of business that is less than RM 150K.
How does Xero support E-Invoicing Malaysia?
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Pre Relaxation Period
(1st January 2025 - 30th June 2025)
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Post Relaxation Period
(1 July 2025 onwards)
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Xero e-Invoicing Malaysia will support submitting consolidated e-invoice and self-billed e-invoice.
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Xero e-Invoicing Malaysia will support sending individual e-invoices to IRBM.
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Getting started with Xero E-Invoice Malaysia – 5 Steps to setup in Xero
1. Go to the MyInvois Portal and add an intermediary
The first invoicing process is login to the IRBM MyInvois Portal, select taxpayers profile and add an intermediary.
2. Go to Xero, and ensure the organisation details are correct.
Ensure all the company details are correctly filled in Xero organisation Settings.
3. Register for e-Invoicing
Login to Invoici from Xero and complete the registration process.
4. Submitting income and expenditure summary
During the first 6 month ‘relaxation’ period, submit Income and Expenditure summary as a ‘consolidated e-Invoice’, within 7 calendar days of the end of each calendar month. More detail on how to do this in Xero is coming soon.
5. Update customer and supplier details in Xero
Ensure that the customer and supplier contact details are updated in Xero in preparation for post-‘relaxation’.
1. What is a self-billed e-Invoice Malaysia?
A self-billed e-Invoice is used to document expense transactions under eight specific scenarios outlined in Section 8.3 of IRBM’s e-Invoice Specific Guideline. These include payments to agents, dealers, or distributors, and transactions with foreign supplier, among others.
2. How do I record a self-billed e-Invoice in Xero?
A self-billed e-Invoice is recorded in Xero as a Bill.
3. Do I need to record all expenses as self-billed e-Invoices?
No, self-billed e-Invoices are only applicable for the specific scenarios detailed in Section 8.3 of IRBM’s e-Invoice Specific Guideline.
4. What is a consolidated e-Invoice Malaysia?
A consolidated e-Invoice includes multiple transaction details in a single document, used for sales where the buyer has not requested individual e-Invoices.
It must be submitted to IRBM within 7 days after the month ends, except for certain transactions requiring individual e-Invoices, as specified in Section 3.7 of IRBM’s e-Invoice Specific Guideline.
5. What is a consolidated self-billed e-Invoice?
A consolidated self-billed e-Invoice operates like a consolidated e-Invoice but applies only to specific circumstances outlined in Section 8.3 of IRBM’s e-Invoice Specific Guideline.
6. Are consolidated e-Invoices treated differently during the 'relaxation' period?
Yes. During the relaxation period, large taxpayers may bulk report monthly using consolidated e-Invoices, which summarize sales transactions for the month’s efficiency.
Consolidated self-billed e-Invoices are also allowed for specific scenarios mentioned in Section 8.3 of IRBM’s e-Invoice Specific Guideline.
7. What should I do to meet the regulatory requirements on January 1, 2025?
During the relaxation period, Phase 2 users can submit monthly consolidated e-Invoices for sales transactions and monthly consolidated self-billed e-Invoices for specified scenarios. Phase 3 requirements will take effect on 1 July 2025.
8. What if a buyer requests an individual e-Invoice?
According to Section 16.2(d) of IRBM’s e-Invoice Specific Guideline, during the relaxation period, if you issue monthly consolidated e-Invoices for sales transactions and monthly consolidated self-billed e-Invoices for specified scenarios, individual e-Invoices are not required even if requested by a buyer.
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