Malaysia’s e-Invoicing Implementation Relaxation by IRBM

To align with the global shift towards digitalization, Malaysian authorities have taken steps to implement e-invoicing as part of their tax administration reforms. They have gradually rolled out the initiative, beginning with key announcements and leading up to a pilot phase, allowing all taxpayers’ voluntary participation. This phase is designed to help businesses familiarize themselves with the system before it becomes compulsory.

IRBM has announced a six-month grace period for the original e-invoicing compliance deadline starting from 1 August 2024. This is to ensure smooth transitioning and implementation of e-invoicing. 

Here’s a brief overview of the major milestones and updates shared by the authorities over time:

Existing Implementation Timeline

e-Invoicing in Malaysia will be implemented in a phased manner for a smooth transition and to provide sufficient time to adapt to these changes based on the turnover or revenue threshold, which is as follows:

The new e-invoicing Implementation Timeline was announced on 26^th July 2024

The IRBM agreed to provide a six-month of interim relaxation period from the date of mandatory Implementation of each implementation phase to taxpayers, as follows:

Following points to be followed by taxpayers during the Interim Relaxation period

• Issuance of Consolidated e-invoice for all the activities and transactions.
• Issuance of Consolidated Self-billed e-invoice.
• Any Input can be provided in the “Description of Product or services” field in a consolidated e-invoice or consolidated self-billed e-invoice.
• No requirement to issue individual e-invoices or individual self-billed e-invoices even if the buyer or supplier has requested for it subject to the condition that the taxpayer timely issues consolidated e-invoices and consolidated self-billed e-invoices.

No Prosecution for Non-Compliance

• the IRBM will not undertake any prosecution action under Section 120 of the Income Tax Act 1967 during the interim relaxation period on non-compliance of the e-Invoice requirements, provided that taxpayers comply with the requirements of timely issuance of consolidated e-invoices and consolidated self-billed e-invoices.

How would the Grace period affect Businesses?

IRBM has extended the timelines by six months of grace periods to liberalize the transition process. Here is how it will impact Businesses.

• Taxpayers will get sufficient time to transit to the e-invoicing system
• Risk reduction of errors and anomalies due to hassle-free implementation.
• Reduction of pressure from businesses to implement e-invoicing immediately.
• This provides sufficient time for businesses to carry out operational activities both in an old and new manner and identify errors, if any, before entirely shifting to the new process.
• Sufficient time for adaptation and training across businesses to learn new e-invoicing systems and methods.

Looking Forward

Implementing e-invoicing in business processes as soon as possible is highly advisable, as waiting for deadlines will only cause pressure and errors, leading to heavy fines and penalties. This is a valuable interim relaxation period where any mistake carried out will not be penalized by IRBM. Therefore, experts and the government highly recommend utilizing this period for a smooth transition.

So What are you waiting for?

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