E-Invoicing: What Malaysian Businesses Need to Know

From 1st August, e-invoicing becomes mandatory for some businesses in Malaysia. This shift is particularly significant for companies with substantial annual turnovers. Here’s a concise guide on what e-invoicing entails and how it will impact Malaysian businesses.

What is E-Invoicing?

E-invoicing is a digital representation of transactions between sellers and buyers, replacing traditional paper or electronic documents like invoices, credit notes, and debit notes. This change aims to streamline the invoicing process, making it more efficient and reducing errors.

Key Points About E-Invoicing

Implementation Dates:

• Businesses with annual turnovers over RM100 million must implement e-invoicing by 1st August 2024.
• Those with turnovers between RM25 million and RM100 million have until 1st January 2025.
• All taxpayers must adopt e-invoicing by 1st July 2025, with micro SMEs earning below RM150,000 being exempt.

Regional Adoption:

• E-invoicing is already implemented in Indonesia and Vietnam.
• In Singapore and Thailand, e-invoicing is voluntary.
• China requires new taxpayers to use the Fapiao system, a form of e-invoicing.

Legal Implications:

Not issuing e-invoices is an offence under Section 120(1)(d) of the Income Tax Act 1967. Offenders may face fines between RM200 to RM20,000, jail time of up to six months, or both for each instance of non-compliance.

Transition Period:

A six-month flexibility period is provided for the first phase, allowing businesses time to adjust.

What Does an E-Invoice Include?

An e-invoice contains the same essential information as traditional invoices:

• Seller’s and buyer’s details
• Item description
• Quantity and price excluding tax
• Tax amount
• Total amount

E-invoices cater to various transaction types, including Business to Business (B2B), Business to Consumer (B2C), and Business to Government (B2G). They apply to both domestic and cross-border transactions.

The Impact on Businesses

E-invoicing is a significant step towards digitising the Malaysian economy. For businesses, especially those with high turnovers, this shift means greater efficiency in managing invoices, reduced paperwork, and fewer errors. It also ensures Malaysian businesses remain competitive globally.

At Colony, we understand the importance of staying ahead in the corporate world. Adapting to new regulations like e-invoicing is crucial for compliance and optimising operations. For our corporate clients, we provide a seamless working environment that supports such transitions smoothly.

Stay informed and prepare to implement e-invoicing in your business practices. Embrace the change to ensure compliance and enjoy the benefits of a digitised invoicing system.

Looking for an office?

If you need a sophisticated workspace that supports your corporate needs, consider Colony Coworking Space. Our private offices provide the perfect environment to manage your business, with luxury and convenience inspired by hospitality. Our dedicated team ensures your needs are met so you can focus on your work. We make workdays a pleasure you anticipate.

Contact us today to learn more about our private office solutions and how we can help your business succeed in this new digital era.