By August 2024, e-invoicing had become essential for businesses in Malaysia, driven by the Inland Revenue Board of Malaysia (IRBM) and its MyInvois portal. E-invoicing automates the issuance and processing of tax-compliant invoices, improving efficiency. As compliance demands increase, CFOs must ensure their organizations adhere to these regulations by following the LHDN checklist and the E-Invoice Malaysia Guideline.
The E-Invoice Start Date varies by business size: companies with a turnover exceeding RM100 million must comply by January 2024, while smaller businesses have until 2025, as outlined in the LHDN E Invoice Guidelines. Non-compliance can lead to penalties ranging from RM5,000 to RM50,000, with potential legal consequences for severe violations.
This guide will help you navigate the regulatory requirements of e-invoicing, covering critical checklist items for implementation, interactions with LHDN's e-invoicing system, compliance deadlines, and the financial implications of non-compliance.
E-Invoicing Checklist for CFOs in Malaysia
1. Identify Your Compliance Phase
The e-invoicing rollout is phased, based on your business's turnover:
- January 2024: Companies with turnover exceeding RM100 million.
- 2025: Full compliance for all businesses.
Action: Check your company’s annual turnover and determine your compliance phase using the E-Invoice Start Date specified in the LHDN E Invoice Guidelines.
2. System Selection and Integration
Ensure your business adopts a compliant e-invoicing platform that integrates with MyInvois portal for real-time data exchange. Your selected system must support API integration for seamless transmission of invoice data.
Action: Review e-invoicing solutions that align with LHDN standards, ensuring it integrate smoothly with your ERP or accounting systems.
3. API Integration for Real-Time Updates
MyInvois supports API integration for faster, more efficient data transfers. Proper API integration automates tax filings and ensures your invoices reach LHDN in real-time.
Action: Work with your IT department or vendor to implement and test API integration for MyInvois compliance.
4. Invoice Data Compliance
Invoices must meet specific legal requirements set by LHDN, including:
- Unique invoice numbers
- Complete supplier and customer details
- Clear item descriptions, quantities, and pricing
- Appropriate SST tax rates
Action: Regularly review and audit invoices to ensure they meet these requirements.
5. Secure Data Storage and Backup
CFOs must ensure that all invoices are securely stored for future reference, with a backup mechanism in place. LHDN mandates that e-invoices be kept for at least seven years.
Action: Implement secure digital storage solutions and establish regular backup schedules.
6. Monitoring and Auditing
Perform regular audits to ensure compliance and accuracy in e-invoice submissions. E-invoicing platforms offer tools for monitoring and managing invoices efficiently, aligning with the LHDN checklist.
Action: Schedule regular internal audits to verify compliance with LHDN's requirements and ensure all invoice data's accuracy.
7. Risk Management and Penalties
The penalties for non-compliance with the e-invoicing system can be severe. For each case of non-compliance, fines range from RM200 to RM20,000, with the possibility of imprisonment for severe violations.
Action: Set up internal alerts and automated processes to ensure timely and correct invoice submission and avoid unnecessary penalties.Engaging with the LHDN E Invoice MyInvois System
1. Early Registration
All businesses must register with the MyInvois Portal to access e-invoicing functionalities. Registering early ensures ample time to familiarize yourself with the system and the LHDN E Invoice Guidelines.
Action: Complete registration via the MyInvois portal early to avoid any last-minute rush.
2. Stay Updated with System Changes
LHDN’s MyInvois platform is frequently updated to improve functionality. Businesses must stay informed about any changes or updates.
Action: Subscribe to LHDN’s updates and ensure that your team is aware of any system changes or new features.
3. Automate Submissions
LHDN’s platform supports automated invoice submissions, which reduces manual input and errors.
Action: Set up automated workflows that ensure real-time invoice submission to MyInvois to reduce the risk of missing deadlines.
Financial Benefits of E-Invoicing for CFOs
1. Early Registration
All businesses must register with MyInvois to access e-invoicing functionalities. Registering early ensures businesses have ample time to familiarize themselves with the system.
Action: Complete registration via the MyInvois portal early to avoid any last-minute rush.
2. Stay Updated with System Changes
LHDN’s MyInvois platform is frequently updated to improve functionality. Businesses must stay informed about any changes or updates.
Action: Subscribe to LHDN’s updates and ensure that your team is aware of any system changes or new features.
3. Automate Submissions
LHDN’s platform supports automated invoice submissions, which reduces manual input and errors.
Action: Set up automated workflows that ensure real-time invoice submission to MyInvois to reduce the risk of missing deadlines.
Q&A | LHDN E Invoice Compliance Checklist for CFOs
The standard format for e-invoices in Malaysia is typically XML, ensuring compatibility with the MyInvois Portal, though other formats like JSON may also be supported.
To download an e-invoice PDF, log in to the MyInvois Portal, go to the Invoice History section, select the invoice, and click Download PDF to save the file.
An e-invoice must include a unique invoice number, supplier and customer details, invoice date, item descriptions, quantities, unit prices, applicable SST rates, and the total amount payable.
An e-invoice for Malaysia LHDN is a digital invoice that complies with LHDN’s data and format requirements, ensuring real-time submission and compliance through the MyInvois Portal.
