Important Updates : The Inland Revenue Board’s new and updated guidelines on e-Invoices and the Software Development Kit

On April 6, 2024, the Inland Revenue Board of Malaysia (IRBM) shared new documents on their website. These are important for handling e-invoices.

By
Ajith Kumar M
May 3, 2024
5 min

On April 6, 2024, the Inland Revenue Board of Malaysia (IRBM) shared new documents on their website. These are important for handling e-invoices. You can check these documents at the given link:

  • e-Invoice Guideline (Version 2.3)
  • e-Invoice Specific Guideline (Version 2.1)
  • Software Development Kit

These guides are based on Section 134A of the Income Tax Act 1967. They help make sure you follow the rules for e-invoicing in Malaysia.

e-Invoice Guideline (Version 2.3)

e-Invoice Implementation Timeline

E-invoicing will be introduced gradually to make it easier for businesses to switch over.  Smaller businesses will have more time to adjust because the e-invoice rollout will be done in stages based on their income. There is a specific schedule that shows when e-invoices become mandatory for different business sizes.

Turnover/revenue for 2022, sourced from audited financials or tax returns, dictates the implementation timeline. Once set, this timeline remains fixed, irrespective of subsequent financial fluctuations. Optionally, businesses starting from 2023 can voluntarily comply by 1 July 2025.

Exemption Criteria for e-Invoicing (Section 1.6.1, Page 15)

  • The list of exemptions from mandatory e-Invoicing has been updated to include "individuals who do not engage in any business activities." This exemption means that such individuals are not required to issue e-Invoices, including self-billed e-Invoices, which are typically used in contractor or freelancer arrangements where the recipient, rather than the supplier, generates the invoice.

Engaging with Government Entities (Section 1.6.5, Page 15)

  • When conducting transactions with certain government-related entities identified in Section 1.6.1 subsections (e) through (j), suppliers are permitted to use a standard Tax Identification Number (TIN), referred to as the “General TIN,” found in Appendix 1 of the e-Invoice guidelines. This simplifies transactions with entities such as:
    • Government and state authorities
    • Local municipalities and statutory bodies
    • Facilities operated by government or statutory bodies, such as hospitals and community centers

Ensuring Accurate e-Invoice Submission (Section 2.3.2, Page 22)

  • The IRBM emphasizes the responsibility of suppliers to verify the accuracy of all e-Invoice data submitted for validation. This requirement aims to minimize errors and ensure that the information reflects the true nature of the transactions, facilitating smoother processing and compliance with tax regulations.

Receiving a PDF Version of Validated e-Invoices (Section 2.3.3, Page 23)

  • Once an e-Invoice has been validated, suppliers will receive a PDF version of the invoice via the MyInvois Portal. This document serves as a visual confirmation of the e-Invoice’s validation, providing an official record that can be used for accounting and audit purposes.

QR Code Integration in e-Invoices (Section 2.3.5, Page 24)

  • The validated e-Invoice will include a QR code, a feature that enhances the security and traceability of the document. The QR code enables anyone with access to verify the authenticity and status of the e-Invoice via the MyInvois Portal quickly.

Cancellation and Rejection of e-Invoices (Section 2.3.6, Page 25)

  • Both suppliers and buyers are afforded the opportunity to cancel or reject an e-Invoice within a 72-hour window following its validation. This process is managed through the MyInvois Portal, designed to provide flexibility and convenience to both parties involved. If the e-Invoice is neither cancelled nor rejected within this period, any necessary adjustments must be addressed by issuing a new document, such as a credit note, debit note, or refund note.
e-Invoice Required Fields Update

Updated e-Invoice Required Fields (Version 2.3)

Item No. Field Name Description Status
40 Total Payable Amount Total amount due after all adjustments, mandatory at invoice level. New Mandatory
39 Total Net Amount Sum of all line items, excluding taxes and deductions, optional at invoice level. New Optional
41 Rounding Amount Adjustment to round the total amount to the nearest whole number, optional. New Optional
42 Total Taxable Amount Per Tax Type Sum of taxable amounts for each tax category, optional at invoice level. New Optional
47 Fee / Charge Rate Rate of any additional fees or charges, optional for each line item or invoice. New Optional
48 Fee / Charge Amount Total additional fees or charges, optional for each line item or invoice. New Optional
e-Invoice SDK Updates

e-Invoice Software Development Kit (SDK) Updates

Component Update Description
General The updated SDK replaces the previous version, enhancing API functionalities for easier integration and improved security features.
API Functions The SDK now categorizes API functions into Platform APIs and e-Invoice APIs, detailing each with expected parameters and response messages.
Data Fields Increased mandatory data fields from 37 to 55, and optional fields now include additional categorizations and examples in alignment with UBL 2.1 standards.
Security Integration of advanced security protocols and requirements for digital signatures, enhancing the integrity and authentication of e-Invoices.
Throttling and Rate Limiting Introduction of throttling and rate limiting on specific API calls to manage load and ensure consistent system performance.
Testing and Validation New guidelines for testing API calls using simulation platforms like Postman, ahead of the go-live date to ensure readiness and compliance.
Compliance and Error Handling Detailed processes for error handling and compliance checks, ensuring robust validation mechanisms for data submitted through APIs.