IRB targets 4,000 businesses by August 2024 for mandatory adoption of E-Invoice by Malaysia LHDN for annual turnover of RM 100 million! By July 2025, E-Invoice will become obligatory for all businesses, irrespective of their sales threshold.
The e-Invoicing system is a significant step forward for the Malaysian government’s digitalization agenda. It is expected to have a positive impact on the economy and help to improve the efficiency of the tax system. The Malaysia LHDN E-Invoicing system is designed to improve the efficiency and transparency of the invoicing process. It will also help to reduce tax evasion and fraud.
LHDN E-Invoice is not a human-readable PDF invoice. It is a machine-readable format. Malaysia LHDN e-Invoice only accepts machine-readable XML, JSON files, not PDF, DOC, JPEG, or email.
Every invoice must be sent to LHDN for approval and validation by the Inland Revenue Board (IRB) before it can be printed as a verified invoice for your customer. IRBM will validation includes TIN and e-Invoice data structures / format. Upon validation of the e-Invoice, the supplier is obliged to share the cleared e-Invoice with the buyer after embedding the validated link (provided by IRBM) in a form of QR code on the e-Invoice. The QR code can be used to validate the existence and status of the e-Invoice via MyInvois Portal.
Refer to the IRBM e-Invoice guideline version 1.0, IRBM will develop the Continuous Transaction Control (CTC) Model where the validation is done instantly (or near-instantly) by IRBM.
Businesses in Malaysia can voluntarily adopt E-Invoicing with the Inland Revenue Board (LHDN) from August 1, 2024. E-Invoicing will be mandatory for all businesses based on their turnover or revenue thresholds, and will be implemented in phases. Businesses with annual turn over more than RM 100 million the original implementation date of June 1, 2024 has been postponed to August 1, 2024. However, following the budget announcement by the Prime Minister on October 13, 2023, the implementation date for all other businesses has been bring forward by 18 months early to July 1, 2025. The implementation details are as follows:
A TIN number in Malaysia is a Tax Identification Number, also known as Nombor Pengenalan Cukai. It is a unique number assigned to individuals and entities registered as taxpayers with the Inland Revenue Board of Malaysia (IRBM). The TIN number is used by the IRBM to identify taxpayers and track their tax records. It is also utilized by the IRBM to monitor taxpayer compliance and detect tax evasion.
The Inland Revenue Board of Malaysia (LHDN) has announced an update to the format of Tax Identification Numbers (TINs) for Malaysian taxpayers. The new format will be effective from January 1, 2023.
The old TIN format was a 12 or 13-digit number, with the first one or two letters indicating the type of taxpayer, such as “SG” for individual residents or “C” for companies. The remaining digits constituted a unique identifier for the taxpayer.
The new TIN format will consist of a 13-digit number. The first two letters will be “IG,” which stands for “Individual taxpayer.” The remaining 11 digits will remain the same as the old TIN number. Here’s how to check your TIN number online.
For more information about the new TIN format, please visit the LHDN website.
SQL Accounting is a user-friendly accounting software that is compatible with Malaysia LHDN E-Invoice. With SQL Accounting, you can easily create and send e-Invoice to your customers. You can also track the status of your e-Invoice and ensure that they are properly validated by the IRBM.
What’s more, if you purchase a new set of SQL Accounting software effective 1st August 2023, you will be entitled to a free E-Invoice module up to 2028! This means that you can save money on the cost of LHDN E-Invoice and get started with E-Invoice right away.
Contact us today to learn more about SQL Accounting and how it can help you comply with E-Invoice regulations. We also offer a FREE DEMO of SQL Accounting so you can see how our software can benefit your business.
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