E-INVOICE FREQUENTLY ASKED QUESTION (FAQ)

1) E-invoice implementation timeline:

*Micro SMEs with an annual turnover below RM150,000 are exempted

2) Do I need e-invoice as supporting documents if I wish to claim for tax deduction or tax relief?

Yes, e-invoice is required as proof in order to claim tax deduction or tax relief.

3) Does e-invoice only involve transactions that happen within Malaysia?

No, e-invoices are necessary for all transactions, whether they are within the country or involve international trade, including import and export activities.

4) What is a TIN number?

TIN number is a person's tax reference number, refer to the link for details: How can I get TIN No.?

5) How many type of e-invoice?

In Malaysia, electronic invoices (e-invoice) are primarily categorized into Two main groups:
Consolidated e-invoice, self-billed e-invoice.

6) What is Consolidated e-invoice?

According to the LHDN's guidelines, companies have the option to issue normal receipts or invoices and aggregate them into a consolidated e-invoice and submit consolidated e-invoices to LHDN within seven calendar days after the month-end. 

7) Which type of industries are prohibited from issuing consolidated e-invoice?

Certain industries are prohibited from issuing consolidated e-invoices. These industries include:

1. Automotive;
2. Aviation;
3. Luxury goods and jewelry;
4. Construction;
5. Wholesalers and retailers of construction materials;
6. Licensed betting and gaming; and
7. Payment to agents / dealers / distributors.

8) What is Self-billed e-invoice?

Self-billed e-invoice is the buyer assumes the role of the supplier, acting as the issuer of the e-invoice, which is then submitted to the LHDN for validation. Once validated, the buyer can use the validated e-invoice as proof of expense for tax purposes. 

9) Which industries need to prepare self-billed e-invoice?

1. Payments to agents, dealers, distributors, etc.
2. Goods sold or services provided by foreign suppliers
3. Profit distributions (e.g. dividend distributions)
4. e-commerce
5. Purchase of goods or services from non-sellers.

10) What information will be received after LHDN validation?

After verification of e-invoice, the follows will be received:
 

• The validated e-invoice
• Date and time of validation
• Validation link
• Unique Identifier Number (UIN)

11) If there is an error in an e-invoice after it has been submitted to LHDN, can it be changed?

Yes, there is a 72-hour timeframe for the e-Invoice to be cancelled by the seller. Seller can only cancel e-invoice and upload the correct e-invoice, no amendment is allowed.

12) What is the procedure if I discover an error after an e-invoice cancellation period (72 hours)?

Cancellation after 72 hours is not allowed. If seller wants to make an amendment after 72 hours, he has to issue a new e-invoice (i.e. debit note, credit note or refund note e-invoice) to contra it, then, prepare and upload the new, complete e-invoice.

13) My business is primarily involved in cash sales. Can I skip issuing e-invoice?

LHDN allows businesses that primarily involve cash sales to issue regular receipts to customers. However, the company must aggregate them into a consolidated e-invoice and submit to LHDN within seven calendar days after the month-end. 

14) How to issue an invoice if my client is not compulsory to apply for e-invoice system yet, or vice versa?

During the transitional period, all taxpayers will be allowed to provide either normal bill / receipt / invoice (as per current business practice) or validated e-Invoice to substantiate a transaction for tax purposes until full implementation has been in place.

15) What should I do if a customer requests an e-invoice (previous month) after a month?

Seller should inform the customer that the consolidated e-invoice has been submitted to LHDN so it's not possible to issue a previous month's e-invoice again.

16) If the buyer forgets his/her TIN number, can he/she just provide the IC number?

Yes. For tax resident, e-invoice needs either TIN or IC number, but for non-tax resident, TIN number is a must.

17) How do taxpayers issue an e-invoice to a non-TIN holder such as foreign buyers?

Suppliers are required to obtain buyer’s details from the foreign buyers for the purposes of e-Invoice issuance.
In relation to TIN to be input in the e-Invoice, suppliers may use “EI00000000020” for foreign buyers without TIN.

18) If I buy goods from a foreign seller, do I need to prepare a self-billed e-invoice?

Yes, the seller can issue a self-billed e-invoice after obtaining customs clearance.

19) If my employee makes a purchase for the company,  but the e-invoice is not the company's name, can the received e-invoice still be used?

According to the guidelines published by LHDN, when an employee makes a purchase on behalf of the company, it is acceptable for the e-invoice to have either the company’s name or the employee’s name.

20) As a seller on e-commerce platforms (Shopee, Lazada), who is responsible for issuing e-invoices to the buyers?

According to the guidelines published by LHDN, the platform is responsible for issuing e-invoices to the buyers on behalf of the sellers. The platform will charge the seller a fee for this service and the seller needs to issue a self-billed e-invoice as a proof.

21) If my company rents a shop from an owner, does the owner need to issue an e-invoice to the company?

When an individual property owner rents out a house or shop, it is not considered a business transaction. Therefore, the company needs to issue a self-billed e-invoice for this expense.

22) Can a payment voucher or official receipt be used as a proof of rental payment for tax relief?

No, you need to issue a self-billed invoice to prove this expense.


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