Malaysia CTC e-invoice Reporting:
From August 2024, e-invoicing in Malaysia will become mandatory for taxpayers with an annual turnover or revenue of more than RM100 million. The mandate will follow the continuous transaction control (CTC) model and will require e-invoices to be validated by the country’s tax authority, as well as reporting certain transactions. Rollout to all other taxpayers undertaking commercial activities in Malaysia will follow in 2025.
Read on for an overview of Malaysia e-invoicing requirements and bookmark this page to stay updated with the latest mandate developments.
The issuance of an electronic invoice and submission for validation to the IRBM’s Platform (MyInvois) will be mandatory in Malaysia for certain determined transactions (e.g. automotive, aviation, construction).
For transactions where e-invoicing is mandatory, and in all other transactions where the buyer requests the issue of an e-invoice, the supplier will need to issue an e-invoice in XML or JSON format and submit it to the IRBM´s MyInvois platform for validation.
To comply with this e-invoicing requirement, taxpayers can use the MyInvois platform through the free solution offered by IRBM or integrate through specific APIs. A Software Development Kit has been released by the IRBM for this purpose.
The platform will perform certain validation checks, not only to the e-invoice structure but also to Taxpayer Identification Numbers (TIN). Once the e-invoice receives validation from IRBM, buyers are allowed to submit rejection requests stating the rejection reason.
On the other hand, suppliers can agree to such rejections and issue cancellations of the e-invoice during a 72-hour period.
Following validation, suppliers handle the exchange of validated e-invoices. The exchanged e-invoice should include the original validated e-invoice, the validation link provided by the IRBM in the form of a QR code and a PDF copy.
The QR Code enables the verification of the existence and status of the e-invoice through the MyInvois portal.
Malaysia B2B e-invoicing
CTC Type
E-invoice reporting.
Network
E-invoices are processed via the MyInvois portal, however, they should be exchanged out-of-band.
Format
XML or JSON.
eSignature Requirement
Not known at this time.
Malaysia B2G e-invoicing
CTC Type
E-invoice reporting.
Network
E-invoices are processed via the MyInvois portal, however, they should be exchanged out-of-band.
Format
XML or JSON.
eSignature Requirement
Not known at this time.
E-invoicing in Malaysia: Key requirements and regulations
From August 2024, Malaysian taxpayers with an annual turnover or revenue of more than RM100 million will be required to submit and clear e-invoices for certain transactions.
Malaysia e-invoicing adopts a continuous transaction control (CTC) approach. E-invoices must be submitted and cleared via MyInvois, the e-invoicing portal of the Inland Revenue Board of Malaysia (IRBM).
As of the 9 February 2024, the IRBM guidelines state that mandatory e-invoicing will be for specific sectors and transactions.
Sectors in-scope of mandatory e-invoicing include:
- Automative
- Aviation
- Luxury good and jewellery
- Construction
- Licensed betting and gaming
- Payments to agents, dealers and distributors
For cross-border transactions, Malaysian taxpayers must issue a self-billed e-invoice to document the expense, but foreign parties do not need to implement the Malaysia e-invoicing system.
B2C transactions fall outside of the e-invoice mandate. Any e-invoices for transactions not in scope are subject to the buyer’s request.
What is an e-invoice in Malaysia?
An e-invoice is a digital representation of a transaction between a supplier and a buyer that replaces all paper or electronic documents serving as invoices, credit notes and debit notes.
An e-invoice under the new framework is a structured file created in a defined format that can be automatically processed by the relevant systems. The e-invoice structure includes 53 mandatory fields and must be submitted in either XML or JSON format.
An e-invoice will contain the same essential information as per current practices, such as supplier’s and buyer’s details, item description, quantity, price excluding tax, tax, and total amount.
Following the validation process, e-invoices must include an embedded QR code.
PDFs, Doc, JPG and paper will not be considered as e-invoices.
What is the process flow of an e-invoice in Malaysia?
E-invoice issuance: Taxpayers must submit e-invoices to the IRBM via the MyInvois portal or through a third-party e-invoicing software API in XML or JSON format.
Validation: Once submitted, the e-invoice is validated in real-time and a Unique Identification Number, validation link (QR Code) and PDF format of the cleared e-invoice are sent to the supplier.
Validation notification: The IRBM performs certain validation checks on the e-invoice structure and on taxpayers identification numbers and notifies the buyer and supplier of the validated invoice.
E-invoice sharing: Suppliers should share the validated e-invoice and a visual representation with a QR code embedded. The QR code allows buyers to validate the existence and status of the e-invoice via MyInvois. It’s the supplier’s responsibility to share the document with the buyer.
Rejection or cancellation: Optional rejection (buyer side) and optional cancellation (supplier side) requests have a 72 hour time limit, after which the invoice is considered valid. Any corrections or amendments made after the 72 hour limit will need to be made through credit, debit or refund notes.
Transaction Summary: A summary of the transaction can be viewed via the portal.
What are the types of e-invoices in Malaysia?
In Malaysia, the e-invoice mandate covers the below document types:
- Invoice
- Credit note
- Debit note
- Refund invoice
- Self-billed invoice
E-reporting regulations in Malaysia
For all other transactions that fall outside of the mandatory e-invoicing scope, and where the buyer did not request an e-invoice to be issued, suppliers can issue an invoice or receipt as per the current practices (e.g. paper).
However, in these cases, suppliers are required to instead issue a consolidated e-invoice aggregating all invoices and receipts on a monthly basis, within 7 days of the month end-. Consolidated e-invoices are common in Malaysia today, and this requirement allows this practice to continue, while still giving the IRBM access to aggregated transaction data. These consolidated invoice reports are issued to a ‘general public’, without specification of each buyer, and a general TIN is provided.
A description of the products or services is provided by the summary of each receipt presented as separate line items in the consolidated e-invoice and/or the list of receipts (in a continuous receipt number) presented as line items.
Additionally, when consolidated- e-invoices are issued, MyInvois will send notifications back to the supplier only. Rejections are not allowed from the buyer side and suppliers are not required to share the validated e-invoice with buyers.
Consolidation cannot be used for self-billed invoices.
Implementation timeline
2015: Malaysia introduces voluntary e-invoicing
October 2022: The Malaysian Ministry of Finance announces plans for e-invoicing pilot program for select taxpayers
November 2023: Mandatory e-invoicing implementation timeline is delayed to August 2024
February 2024: Inland Revenue Malaysia publishes Software Development Kit and e-invoicing guidelines
August 2024: Mandatory e-invoicing and clearance in Malaysia for taxpayers with an annual turnover or revenue of more than RM100 million (aprox. 20 million euros)
January 2025: Mandatory e-invoicing for taxpayers with an annual turnover or revenue between RM25 million (aprox. 5 million euros) and RM100 million
July 2025: Mandatory e-invoicing for all taxpayers
For the latest updates and in-depth timeline bookmark our Malaysia e-invoicing system blog.
Setting up e-invoicing and
e-reporting in Malaysia
Malaysia’s e-invoicing mandate allows submission of e-invoices via a third-party API. Sovos’ e-invoice and e-reporting compliance solutions are suitable for Malaysia and other international tax requirements.
Speak with a Sovos expert to set-up e-invoicing in Malaysia.
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FAQ
Is e-invoicing mandatory in Malaysia?
E-invoicing will become mandatory for certain transactions for taxpayers with an annual turnover or revenue of more than RM100 million from August 2024. Additional taxpayers will be in scope from 2025 with all taxpayers included by July 2025.
Is e-reporting mandatory in Malaysia?
There is a consolidated e-invoice requirement for transactions where e-invoicing is not mandatory, and the buyer does not request an e-invoice to be issued. Taxpayers must aggregate all invoices and receipts issued and issue a consolidated e-invoice via the MyInvois, on a monthly basis (within 7 days from the month end).
Should I use e-invoicing in Malaysia?
E-invoicing is currently optional for taxpayers in Malaysia but an upcoming mandate will make it a requirement for all taxpayers by 2025. The first group of taxpayers need to comply by August 2024.
What is the e-invoicing authority in Malaysia?
The Inland Revenue Board of Malaysia (IRBM) is the e-invoicing authority in Malaysia. The IRBM is responsible for the MyInvois Portal, the platform used to submit, clear and validate e-invoices in the country.
How will businesses use e-invoicing in Malaysia?
Taxpayers within scope of the e-invoicing mandate submit documents via the country’s MyInvois Portal for validating, before sharing with the buyer. The real-time e-invoicing process saves time and resources for businesses and facilitates cross-border and international trade.
Where else is e-invoicing available in Asia-Pacific?
Malaysia is one of many countries in Asia Pacific to adopt e-invoicing including , China, South Korea, Singapore, Japan and the Philippines.
