As part of the 2023 state budget presented in 2022, the Malaysian government decided to introduce and gradually implement an electronic invoicing system in the country.
The state budget law doesn’t contain any details about the e-invoicing system, however, in a recent engagement session held by the Inland Revenue Board (IRB) of Malaysia and the Malaysian Digital Economy Corporation, a timeline for the roll-out of the e-invoicing system and details about e-invoicing model were shared.
The proposed e-invoicing model consists of a CTC clearance model, where invoices need to be sent to the tax authority in real time to obtain validation before delivering it to the buyers.
Furthermore, it is expected that all domestic (B2G, B2B and B2C) and cross-border transactions will be in scope.
Additionally, the following phased roll-out dates based on annual sales thresholds were shared by the Malaysian Inland Revenue Board:
- Pilot e-invoicing program for selected taxpayers is set to start during 2023. Companies besides the ones selected could also choose to participate voluntarily in the pilot program.
- Voluntary implementation of the e-invoicing system from January 2024;
- Mandatory implementation for businesses with sales above 100 million MYR annual threshold, from June 2024;
- Mandatory implementation for businesses with sales above 50 million MYR annual threshold, from January 2025;
- Mandatory implementation for businesses with sales above 25 million MYR annual threshold, from January 2026;
- Mandatory implementation for all businesses as of January 2027.
However, this is only a speculated timeline and e-invoicing model presented in a conference and there is still no official documentation publicly available yet.