Accounts Payable

Navigating the 72-Hour Grace Period: Insights into Adjustments with Debit Notes and Credit Notes

Navigating the 72-Hour Grace Period: Insights into Adjustments with Debit Notes and Credit Notes

The e-Invoicing system becomes mandatory for businesses with a turnover of RM100 million or more starting August 2024, and it will be implemented for all businesses by July 2025.

This article addresses the modification of e-invoices in Malaysia, emphasizing a critical aspect of this amendment—the 72-hour grace period. This grace period allows businesses to make necessary adjustments to their e-invoices within 72 hours of issuing the original invoice, offering an opportunity to rectify any errors or discrepancies.

It is imperative for businesses operating in Malaysia to comprehend the workings of this grace period and understand how to effectively use debit notes and credit notes to uphold precise and compliant invoicing practices.

Here is a more detailed explanation of the 72-hour e-Invoicing grace period:

  • Within the initial 72 hours of issuing the original invoice, businesses have the option to reject or request cancellation of an e-invoice.
  • Post this 72-hour timeframe, modifications to e-invoices are prohibited.
  • Should any changes be required after the 72-hour window, businesses must issue a new invoice, debit note, credit note, or refund.
  • Maintaining transparent records of these adjustments is crucial, and businesses must adhere to the relevant regulations to ensure compliance with the guidelines set by the Inland Revenue Board (IRB).

Buyer Requests Rejection:

  • The buyer has the option to request the rejection of an e-invoice within a 72-hour period upon receipt.
  • Upon the buyer's initiation of the rejection request, the seller will receive a notification.
  • Approval of the rejection request by the seller is necessary for the cancellation of the e-invoice to take effect.
  • Failure by the seller to approve the buyer's rejection request within 72 hours will result in the automatic validation of the e-invoice.

Seller Perform Cancellation:

  • Within a 72-hour timeframe, the seller can initiate the cancellation of the e-invoice.
  • If the seller successfully cancels the e-invoice, the buyer is relieved of the obligation to pay the specified amount on the invoice.
  • Post the 72-hour period, the e-invoice will automatically be considered valid.
  • Any subsequent modifications to the e-invoice will necessitate the issuance of a debit or credit note.

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Top 5 Questions Asked About E-Invoicing

Can e-Invoices be cancelled after submitting to LHDN?

Yes, e-Invoices can be cancelled within 72 hours of issuance. To cancel an e-invoice. the supplier / customer must submit a cancellation / rejection request to buyer / seller within 72 hours via MyInvois Portal.

Does e-invoice allowed for editing of information after verified by LHDN?

No, the supplier would need to cancel the e-invoice (Refer Q1) and reissue another new e-invoice.

What details are needed for an e-invoice cancellation/rejection request?

The cancellation / rejection request should specify the reason, which can include incorrect invoice data in any field (e.g., SST number, business registration number, any business-related information, etc.).

What if the seller/buyer doesn’t approve my request for amendment/cancellation?

After the 72-hours timeframe, the status of the e-Invoice will automatically change to “Valid”, and any further amendments will require a Debit/Credit Note.

Can I extend the time to adjust an e-invoice?

No, as per IRBM guidelines, there is a 72-hours timeframe for rejection / cancellation of e-invoice. If this time is exceeded, any adjustments will require the issuance of a new invoice, debit note, credit note, or refund.

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