E-Invoice Related Questions
What is E-Invoice?
E-invoice refers to the electronic recording of each transaction. With comprehensive implementation of electronic methods, physical receipts will no longer be necessary, and all transaction records will be backed up in the LHDN database. When taxpayers file their annual taxes, eligible expenses will automatically be calculated in the system, eliminating the need for taxpayers to input them manually.
Why introduce the E-Invoice system?
To enhance tax efficiency and transparency
To reduce tax evasion and fraud
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Who is involved in E-Invoice?
Whether it’s B2B, B2C, or B2G, e-invoice usage is required.
Which industries are exempt from implementing E-Invoice?
Currently, all industries are required to implement e-invoice, with no exemptions.
What types of activities/transactions are not allowed to use consolidated e-invoices?
Automotive industry
Aviation industry
Luxury goods and jewelry industry
Construction industry
Building material wholesalers and retailers
Licensed gaming and gambling
Payments to agents/distributors/dealers
How is E-Invoice different from traditional invoices?
The sole purpose of e-invoice for buyers is tax deduction. If buyers require the transaction for tax deduction purposes, they need to request e-invoice from the merchant. Hence, there are some differences between e-invoice and traditional invoices, such as:
E-invoice requires the taxpayer’s IC number or taxpayer identification number, along with some personal details, whereas traditional invoices do not.
If the expense is not needed for tax deduction purposes (e.g., daily living expenses), e-invoice can be omitted.
What is a Consolidated E-Invoice?
In cases where consumers do not request an e-invoice, merchants can issue regular invoices and, at the end of the month, summarize and issue a consolidated e-invoice, which must be submitted to LHDN within 7 days.
What is a self-billed e-invoice?
A self-billed e-invoice is a unique type of invoice issued by the buyer rather than the merchant. Typically, it is issued when the buyer has a better understanding of the transaction details (e.g., quantity of goods received or services provided). Self-billed invoices serve as proof of the buyer’s expenses and can be submitted to LHDN for verification.
Industries that Need to Prepare Self-Billed E-Invoices:
- Payments to agents, distributors, dealers, etc.
- Goods sold or services provided by foreign suppliers
- Profit distributions (such as dividend distributions)
- Payments to all gambling and gaming winners (at casinos or from gaming machines)
- E-commerce (details yet to be announced)
- Purchases of goods or services from non-merchants
Can a PDF document be considered an e-invoice?
No, an e-invoice refers to an invoice prepared and issued electronically, capable of generating documents that the LHDN system can automatically interpret.
Eligible document formats include: XML, JSON
Ineligible document formats include: PDF, JPG
Is it easy to store E-Invoices?
Compared to traditional invoices, e-invoices are easier to store. All invoices certified by LHDN will have a copy on the MyInvois platform, accessible to both merchants and buyers.
What types of E-Invoices are there?
- Invoice: This is a commercial document detailing transactions between a merchant and a buyer.
- Credit Note: Merchants issue credit notes to correct errors. It is typically used when there is no refund to the buyer, but adjustments are made for discounts or returns against the original e-invoice.
- Debit Note: Debit notes are used to explain adjustments made against previously issued e-invoices due to additional charges incurred.
- Refund Note: A refund e-invoice is issued by a merchant to confirm the repayment of funds to the buyer. It is used when a refund to the buyer is necessary.
Does E-Invoice only involve domestic transactions?
No, E-Invoice is required for both domestic and cross-border transactions, including import and export activities.
Can the MyInvois platform create invoice drafts?
Yes, merchants can create e-invoices in draft mode. E-invoice data and validation will only be collected based on the final submitted e-invoice.
Whom should I contact for inquiries when encountering issues?
For any inquiries regarding e-invoice, you can email myinvois@hasil.gov.my.
What is a TIN number?
A TIN number refers to a Tax Identification Number.
Do I need any specific application to scan the QR code?
The QR code only contains a link to the verified e-invoice. Therefore, any device capable of scanning QR codes (such as a mobile phone camera or QR code scanner application) can scan the QR code.
