We have an important update regarding the Inland Revenue Board of Malaysia (LHDN). On 28th June 2024, the LHDN released an updated version of their guidelines, transitioning from version 2.3 to 3.0. This update includes significant changes and improvements aimed at streamlining processes and ensuring better compliance with the latest tax regulations.
To know about the latest update on einvoice specific guideline: click here
Here is the link to get the full guideline for version 3.0: LHDN e-Invoice General Guideline Version 3.0. Below, we have summarized the updates.
| No | Paragraph in einvoice general guideline | Before (Version 2.3) | After (Version 3.0) |
|---|---|---|---|
| 1. | Abbreviation | None | 1. Application Programming Interface (API) 2. Business-to-Business (B2B) 3. Business-to-Consumer (B2C) 4. Business-to-Government (B2G) 5. Enterprise Resource Planning (ERP) 6. Free Trade Agreement (FTA) 7. Inland Revenue Board of Malaysia (IRBM) 8. JavaScript Object Notation (JSON) 9. Malaysia Standard Industrial Classification (MSIC) 10. Micro, Small and Medium-sized Enterprises (MSME) 11. Software Development Kit (SDK) 12. Companies Commission of Malaysia (SSM) 13. Sales Tax and Service Tax (SST) 14. Tax Identification Number (TIN) 15. Universal Business Language Version 2.1 (UBL2.1) 16. Extensible Markup Language (XML) |
| 2. | 1.3 | 1.3 Transaction Types e-Invoice covers typical transaction types such as B2B, B2C, and B2G. For B2G transactions, the e-Invoice flow will be similar to B2B. e-Invoice applies to | 1.3 Transaction Types e-Invoice covers typical transaction types such as B2B, B2C, and B2G. For B2G transactions, the e-Invoice flow will be similar to B2B. e-Invoice applies to all persons in Malaysia. |
| 3. | 1.6.8 | 1.6.8 The IRBM acknowledged there are various challenges in issuing e-Invoices for certain types of income or expense. To ease the adoption of e-Invoice, an e-Invoice (including self-billed e-Invoice) is not required for the following: (a) Employment income. (b) Pension. (c) Alimony. (d) Distribution of dividend in specific circumstances (Refer to Section 11 of e-Invoice Specific Guideline for more details). (e) Zakat. | 1.6.8 The IRBM acknowledged there are various challenges in issuing e-Invoices for certain types of income or expense. To ease the adoption of e-Invoice, an e-Invoice (including self-billed e-Invoice) is not required for the following: (a) Employment income. (b) Pension. (c) Alimony. (d) Distribution of dividend in specific circumstances (Refer to Section 11 of e-Invoice Specific Guideline for more details). (e) Zakat. (f) Contract value for the buying or selling of securities or derivatives traded on a stock exchange or derivatives exchange in Malaysia or elsewhere. (g) Disposal of shares of a company incorporated in or outside Malaysia and not listed on the stock exchange, except where the disposer is a company, limited liability partnership, trust body or co-operative society. |
| 4. | 1.6.9 | None | 1.6.9 The exemptions mentioned in Section 1.6.1 and 1.6.8 will be reviewed and updated from time to time. To support the e-Invoice initiative, the IRBM has initiated the discussion with the government, state government and relevant authorities to implement e-Invoice. |
| 5. | Figure 2.1 Figure 2.2 Figure 2.3 Figure 2.7 Figure 2.11 Figure 2.14 | Old Diagram | Updated New diagram |
| 6. | 2.3.2 | 2.3.2 Step 1 – Creation and Submission When a sale or transaction is concluded (including e-Invoice adjustments such as debit note, credit note and refund note), the Supplier creates an e-Invoice and submits it to IRBM via the MyInvois Portal for validation immediately. Supplier is to ensure the accuracy of the information included in the e-Invoice that is submitted to IRBM for validation, to the extent possible. | 2.3.2 Step 1 – Creation and Submission When a sale or transaction is concluded (including e-Invoice adjustments such as debit note, credit note and refund note), the Supplier creates an e-Invoice and submits it to IRBM via the MyInvois Portal for validation immediately. Supplier is to ensure the accuracy of the information included in the e-Invoice that is submitted to IRBM for validation, to the extent possible. The MyInvois Portal will specify the mandatory and optional fields to facilitate taxpayers in filling out the data required for the issuance of e-Invoice. For the list of data fields, refer to Appendix 1. |
| 7. | 2.3.5 | 2.3.5 Upon validation of the e-Invoice, the Supplier is obliged to share the validated e-Invoice with the Buyer. The visual representation of the e-Invoice generated from the MyInvois Portal will include a QR code, which can be used to validate the existence and status of the e-Invoice via the MyInvois Portal. | 2.3.5 Upon validation of the e-Invoice, the Supplier is obliged to share the validated e-Invoice with the Buyer. The visual representation of the e-Invoice generated from the MyInvois Portal will include a QR code, which can be used to validate the existence and status of the e-Invoice via the MyInvois Portal. However, the IRBM acknowledges that there may be practical challenges in sharing the validated e-Invoice with the Buyer. Therefore, until further notice, the IRBM provides a concession allowing the Supplier to share either the validated e-Invoice or a visual representation of the validated e-Invoice with the Buyer. |
| 8. | 2.4.4 | 2.4.4 Upon validation of the e-Invoice, the Supplier is obliged to share the validated e-Invoice with the Buyer. The visual representation of the e-Invoice generated from the MyInvois Portal will include a QR code, which can be used to validate the existence and status of the e-Invoice via the MyInvois Portal. | 2.4.4 Upon validation of the e-Invoice, the Supplier is obliged to share the validated e-Invoice with the Buyer. The visual representation of the e-Invoice generated from the MyInvois Portal will include a QR code, which can be used to validate the existence and status of the e-Invoice via the MyInvois Portal. However, the IRBM acknowledges that there may be practical challenges in sharing the validated e-Invoice with the Buyer. Therefore, until further notice, the IRBM provides a concession allowing the Supplier to share either the validated e-Invoice or a visual representation of the validated e-Invoice with the Buyer. |
| 9. | 2.5 | None | 2.5.1 The e-Invoice submitted by the taxpayers will undergo a series of validations within the MyInvois System, ensuring adherence to the data field requirements, formats and standards as stipulated by the IRBM. 2.5.2 The following is the list of e-Invoice statuses: i. Submitted: The e-Invoice has been successfully transmitted to MyInvois System and passed the immediate validations, including e-Invoice structure and core field validations. ii. Valid: The e-Invoice has passed all the immediate and background validations to meet all the data field requirements, formats and standards as defined by the IRBM. iii. Invalid: The e-Invoice has failed one or more validation checks due to incorrect data field requirements, formats or standards as defined by the IRBM. iv. Cancelled: An e-Invoice can only be cancelled by the Supplier within 72 hours of its validation date and time. A cancelled e-Invoice is no longer valid, and if necessary, a new e-Invoice is required to be issued. 2.5.3 e-Invoice validation involves a set of rules used to ensure that submitted documents meet specific requirements. The document validation rules are outlined below: (table 2.2) For details of the document validation rules, please refer to Validations in the SDK. |
| 10. | 2.6 | None | 2.6 Sharing of e-Invoice information between IRBM and Royal Malaysian Customs Department (RMCD) 2.6.1 e-Invoice requirements as stipulated in Appendix 1 have taken into account the required particulars of the key tax legislation, including the Income Tax Act 1967, Labuan Business Activity Tax Act 1990, Petroleum (Income Tax) Act 1967, Sales Tax Act 2018 and Service Tax Act 2018. 2.6.2 Pursuant to Section 138(4)(aa) of the Income Tax Act 1967, e-Invoice information submitted by taxpayers to the MyInvois System will be shared with the RMCD. 2.6.3 For clarity, taxpayers are allowed to adopt any visual representation format for e-Invoice as per current practice. In this regard, taxpayers are advised to include any other particulars as may be required under the applicable laws, rules and regulations such as Sales Tax Act 2018 and Service Tax Act 2018. 2.6.4 For example, if the taxpayer is registered for service tax and the visual representation of the e-Invoice contains the necessary particulars required under Service Tax Regulations 2018, the taxpayer can use the same visual representation for service tax purposes. |
| 11. | Appendix 1 Supplier’s Details – Buyer’s Registration / Identification Number / Passport Number | Supplier’s Details For businesses: Business registration number* For Malaysian individual: MyKad / MyTentera identification number For non-Malaysian individual: Passport number / MyPR / MyKAS identification number | Supplier’s Details For businesses: Business registration number* For Malaysian individual: MyKad / MyTentera identification number For non-Malaysian individual: Passport number / MyPR / MyKAS identification number *Taxpayers registered with the Companies Commission of Malaysia (SSM) are required to only input the new business registration number, which is 12-digit characters. For taxpayers that are registered with other authority / body, the taxpayers are required to input the relevant registration number. |
| 12. | Appendix 1 Buyer’s Details: Buyer’s Registration / Identification Number / Passport Number | Buyer’s Details For businesses: Business registration number* For Malaysian individual: MyKad / MyTentera identification number For non-Malaysian individual: Passport number / MyPR / MyKAS identification number | Buyer’s Details For businesses: Business registration number* For Malaysian individual: MyKad / MyTentera identification number For non-Malaysian individual: Passport number / MyPR / MyKAS identification number *Taxpayers registered with the Companies Commission of Malaysia (SSM) are required to only input the new business registration number, which is 12-digit characters. For taxpayers that are registered with other authority / body, the taxpayers are required to input the relevant registration number. |
| 13. | Appendix 2 Additional mandatory fields to be included in Annexure to the e-invoice | Mandatory Field 1. Shipping Recipient’s Name: Name of shipping recipient of the productsvincluded in the e-Invoice in a commercial transaction 2. Shipping Recipient’s Address: Address (registered, business, residential, etc.) of business or individual who will be the shipping recipient of the products included in the e-Invoice in a commercial transaction 3. Shipping Recipient’s TIN: TIN of the shipping recipient assigned by IRBM 4. Shipping Recipient’s Registration Number / Identification Number / Passport Number: For businesses: Business registration number for Malaysian individual: MyKad / MyTentera identification number for non-Malaysian individual: Passport number / MyPR / MyKAS identification number | Optional Field 1. Shipping Recipient’s Name: Name of shipping recipient of the products included in the e-Invoice in a commercial transaction 2. Shipping Recipient’s Address: Address (registered, business, residential, etc.) of business or individual who will be the shipping recipient of the products included in the e-Invoice in a commercial transaction 3. Shipping Recipient’s TIN: TIN of the shipping recipient assigned by IRBM 4. Shipping Recipient’s Registration Number / Identification Number / Passport Number: For businesses: Business registration number for Malaysian individual: MyKad / MyTentera identification number for non-Malaysian individual: Passport number / MyPR / MyKAS identification number |
