LHDN Rolls Out Phase 2 Of e-Invoicing

The Inland Revenue Board of Malaysia (LHDN), has rolled out Phase 2 of the electronic invoicing (e-invoicing) system.  Phase 2 will involve companies with an annual turnover of between RM25mil and RM100mil.

The aim is to improve the efficiency of tax administration management in Malaysia. When fully implemented, e-Invoicing will enable near-real-time transaction verification and storage, catering for business-to-business (B2B), business-to-consumer (B2C) and business-to-government (B2G) transactions.

Additionally, this system is to address the revenue leakage issue. These leakages usually result from issues such as the shadow economy, which are economic activities that are hidden or unseen by official authorities.

Overview of e-Invoice

Following is an overview of the e-Invoice workflow. It provides a step-by-step walk through from the point of sale up to the point of storing cleared e-Invoices on LHDN’s database.

In order to accommodate tax certainty, Dr Sairi also said that LHDN has put in place the Tax Corporate Governance Programme (TCG).

“This initiative serves as a platform for both tax administration and taxpayers to collaborate in an open and honest manner to enhance the organisation’s corporate tax compliance affairs,” he said.

Implementation timeline

According the LHDN, the implemention will start rolling out in 2nd half of 2024 in phases.  The implementation date will start with businesses with revenue over RM100 million and downwards to all taxpayers by July 2025.

 

2 ways to transmit e-invoice to LHDN

LHDN provides two e-invoice transmission mechanism:
1. MyInvois Portal hosted by LHDN
2. Application Programming Interface (API)

The process to submit e-invoice using MyInvois Portal or API is shown below.

The process to submit e-invoice using MyInvois Portal is shown below.

In order to use the MyInvois Portal, users will need to login to MyTax Porta first. For more information on this system, business owners can refer to LHDN’s e-Invoicing guideline.