E-Invoicing mandate in Malaysia from 2024
During the Inland Revenue Board of Malaysia (LHDN) e-invoicing Initiative Engagement session held on April 12th, Malaysia unveiled plans for a nationwide e-invoicing model to combat tax leakage. The proposed Continuous Transaction Controls (CTC) model would require sales invoices and receipts to be first sent to the tax authorities for verification in real-time before being delivered to the buyer. The LHDN platform will notify the buyer via push notification or email once invoices are cleared.
The proposed timeline for implementation is as follows:
- January 2024: Voluntary adoption of e-invoicing through the LHDN.
- June 2024: Mandatory e-invoicing for taxpayers with an annual turnover of MYR 100 million or above.
- January 2025: Mandatory e-invoicing for taxpayers with an annual turnover of MYR 50 million or above.
- January 2026: Mandatory e-invoicing for taxpayers with an annual turnover of MYR 25 million or above; and
- January 2027: Mandatory e-invoicing for all remaining taxpayers.
What are the transactions in scope?
- All domestic (B2B, B2C, B2G) and cross-border transactions will be in scope.
- What are the documents in scope?
- Sales Invoices
- Credit / debit notes
Which are the businesses in scope?
All Malaysian tax registered businesses producing sales invoices and receipts, including cross-border transactions, will be required to comply with the mandate. However, it is unclear if foreign resident businesses will be included in the obligation.
Will Peppol play a role?
The LHDN confirmed that Peppol cannot be used to send invoices to the LHDN platform for clearance, and API will be the only available method.
How can DespaQ help?
DespaQ provides a technology solution that is centralized and standardized for high-volume global businesses to adhere to e-invoicing regulations in countries where the tax authority requires e-invoicing generation and transmission or structured electronic data reporting. Our solution involves utilizing advanced technology that automates data cleansing, validation, and verification of tax data, thereby minimizing the risk and reducing the need for human intervention.