e-Invoice | i-Account

E-Invoicing Malaysia

(Guide to Residential Property Industry)
E-Invoicing has been integrated into Malaysia's tax system, transforming the way businesses operate in the country. Instead of relying on paper or electronic documents for invoices, credit notes, and debit notes, e-Invoicing with centralized Continuous Transaction Control (CTC) is becoming the norm, streamlining financial operations and increasing accuracy.
What is e-Invoice?

An e-Invoice is a digital representation of a transaction between a supplier and a buyer. E-Invoice replaces paper or electronic documents such as invoices, credit notes, debit notes and refunds. It is a file created either in the Extensible Markup Language (XML) or JavaScript Object Notation (JSON) formats that can be automatically processed by relevant systems. It is not invoice data in PDF or Word formats, or images of the invoice as JPG or TIFF, or HTML on a webpage. Generally, an e-Invoice contains the same essential details as traditional invoices, including information about the supplier and buyer, item descriptions, quantities, pre-tax prices, tax amounts, and total costs. This data is used to monitor daily business transactions.
E-Invoicing Timeline

Targeted Taxpayers Implementation Date
Taxpayers with an annual turnover or revenue of more than RM100 million 1 August 2024

Taxpayers with an annual turnover or revenue of more than RM25 million and up to RM100 million 1 January 2025
All taxpayers 1 July 2025

The annual turnover is based on:-

  1. Taxpayers with audited financial statements: Use turnover from 2022 audited statements.
  2. Taxpayers without audited statements: Use revenue from 2022 tax return.
  3. If accounting year end changes in 2022, turnover is pro-rated for e-Invoice date.
Note: Prior to full implementation, there may be suppliers who do not issue e-Invoice as they have not reached the mandatory implementation phase/date. During this transitional period, LHDN will accept normal invoice/ bill /receipt issued by these suppliers until full implementation.

Benefits of E-Invoicing for Business
  Streamlined Invoicing Process
Enhance your business's efficiency by integrating your invoicing procedures and process from end to end which reduce manual efforts and human errors. E-Invoices facilitate smooth transactions through streamlined document creation, submission, and automated data entry.

  Simplified Tax Reporting
Experience the benefits of a fully integrated system, ensuring accurate and efficient tax reporting with seamless operation for your business.
  Optimized Operation
E-Invoicing transforms operations, empowering large businesses with streamlined processes that drive efficiency, delivering significant time and cost savings.

  Real-Time Digital Financial Reporting
By adopting e-Invoicing in Malaysia, you can synchronize your financial reporting and processes with industry standards tailored for micro, small, and medium-sized enterprises (MSMEs).
E-Invoicing Submission Methods

a. MyInvois Portal
• A portal hosted by LHDN
• Login to MyInvois Portal and generate e-Invoice individually by completing the form
• For businesses without ERP systems

b. Direct Application Programming Interface (API) Integration
• Using API that is a set of programming code that enables direct data transmission between the TimeTec System and MyInvois system
• Login from TimeTec System via Access Token generated by API and generate e-Invoices and submission easily in TimeTec System
• Ideal for large taxpayers or businesses with substantial transaction volumes
Data fields required to issue an e-Invoice

There are 55 data fields (based on LHDN’s e-Invoice Guideline Appendix 1) required to issue an e-Invoice. These fields are grouped into eight (8) categories as below:

IRB Categories Example of Fields
1. Parties Supplier and buyer’s name.
2. Supplier’s Details Supplier’s Tax Identification Number (TIN), email address, 5-digit MSIC code, MSIC description, company registration number/ individual MyKad number/ passport, SST registration number.
3. Buyer’s Details Buyer’s TIN, email address, company registration number/ individual MyKad number/ passport, SST registration number.
4. Address Supplier and buyer’s address.
5. Contact Number Supplier and buyer’s contact number.
6. Invoice Details Including the e-Invoice version, e-Invoice type, e-Invoice code / number, issuer’s digital signature, e-Invoice date and time and etc.
7. Products/ Services Including the description, quantity, unit of measurement (UoM), unit price, discount rate, discount amount, tax type, tax rate, and tax amount and etc.
8. Payment Information Including payment mode, supplier bank account, payment terms and etc.
Individual e-Invoice

Upon the implementation of e-Invoice, especially B2B transactions, suppliers are supposed to issue e-Invoices to all their buyers individually, which we called individual e-Invoice. However, certain buyers, particularly end consumers and certain businesses, may not require an e-Invoice as proof of their expense.

As such, whenever a sale or transaction is made, a supplier has to confirm with each buyer whether a standard or individual e-Invoice is actually required by the buyer. If the answer is yes, the buyer has to request an e-Invoice by informing the supplier accordingly and providing the necessary buyer details for the issuance of the individual e-Invoice.
Consolidated e-Invoice

For certain B2C transactions (e.g. retail and F&B) where e-Invoices are not required by the end consumers to support the said transactions for tax purposes, suppliers will be allowed to issue an invoice in accordance with current practices adopted by suppliers.

Supplier will be allowed to aggregate transactions with Buyers who do not require an e-Invoice on a monthly basis and submit a consolidated e-Invoice to LHDN, within seven (7) calendar days after the month end.

Prior to the above, supplier has to seek confirmation from Buyer if an e-Invoice is required. If the Buyer confirmed that he/ she requires an e-Invoice, the Buyer is required to furnish the Supplier with the required information to facilitate the issuance of e-Invoice.
Self-Billed e-Invoice

There are certain circumstances where taxpayers would have to issue self-billed e-Invoice to document an expense such as foreign transactions. For example, if the taxpayer acquired goods and/or services from foreign supplier and received an invoice from the foreign supplier who does not use Malaysia’s MyInvois System, the taxpayer would be required to issue a self-billed e-Invoice to document the expense.

Hence, in the scenario above, the Buyer will assume the role of the Supplier to be the issuer of e-Invoice and submits it to LHDN for validation. Upon validation, Buyer would be able to use the validated e-Invoice as a proof of expense for tax purposes.
The Importance of Automated e-Invoicing Solution

1. Simplified Issuance of Self-Billed e-Invoices
Easily issue self-billed e-Invoices for various purposes such as commissions to agents, overseas purchases, e-commerce, dividends, taxes, or gaming payouts.

2. Seamless Reconciliation between LHDN and Your Accounts
Identify discrepancies between LHDN server and your system, making it easier than ever to reconcile the accounts.

3. Comprehensive Compliance Solution
Ensure tax compliance through efficient e-invoice issuance, insightful dashboards, role-based access, alert systems, and over 7 years of data archiving.

4. Penalty for Non-Compliance
According to the Income Tax Act 1967, business owners may face fines ranging from RM200 to RM20,000, or imprisonment for up to 6 months, or both for non-compliance!
How e-Invoicing Works

1. E-Invoice Creation
Suppliers create e-Invoices for sales, either automatically through TimeTec systems or manually at the MyInvois Portal.
2. E-Invoice Validation
LHDN validates e-Invoices in real-time to meet standards. Suppliers get a Unique Identifier Number and validation link for traceability.
3. Notification of Validated E-Invoice
LHDN notifies both supplier and buyer upon successful validation.
4. Sharing of E-Invoice
Suppliers send the validated e-Invoices to buyers which are embedded with a QR code for verification.
5. Review of e-Invoices
Suppliers and buyers review e-Invoices via MyInvois Portal.
6. Rejection or Cancellation of e-invoices
Buyers can request rejection, and suppliers can request cancellation, with valid justifications within 72 hours. Any subsequent adjustments will not be allowed to the e-invoice; the supplier and buyer would be required to issue a new e-invoice (e.g., credit note, debit note, or refund note e-invoice) to make an adjustment.
E-Invoicing Tips for Residential Property Management
For iNeighbour & i-Account Solution
For Property Owners

  1. Owners that require an e-Invoice would need to make a request by informing the JMB/MC.
  2. Required to submit owner information to JMB/MC.
  3. i-Account only generate individual e-Invoice upon request from the owner.
  4. Owners can reject the e-Invoices within 72 hours.
  5. If a foreign house owner (non-Malaysian individual) does not have a TIN, Supplier can use the General TIN for foreign buyer, along with the passport number/ MyPR/ MyKAS identification number of the said individual.
For Property Management Company/JMB/MC

  1. JMB/MC are required to register as a Tax Payer.
  2. In LHDN system, JMB/MC are required to assign i-Account to login as the intermediary system for e-Invoices submission.
  3. Require to enhance the invoice template to display the required fields and QR code.
  4. JMB/MC is allowed to submit consolidated e-Invoices on a monthly basis to LHDN by the 7th day of the following month.
  5. JMB/MC is allowed to submit consolidated e-Invoices on a monthly basis to LHDN by the 7th day of the following month.
  6. E-invoice cannot be backdated or post-dated.
  7. Types of e-Invoices to be issued are invoice, credit note, debit note, and refund note.
  8. JMB/MC cannot cancel the E-Invoice after 72 hours. After 72 hours, JMB/MC need to use debit note or credit note to perform any adjustments.
TimeTec E-Invoicing Solution & Delivery Timeline
Ready E-Invoicing Module (iNeighbour & i-Account) consists of:
For Property Owners

  1. Collect customer information via mobile/web app
  2. Retrieve and verify customer TIN
  3. E-Invoices creation and submission
  4. E-Invoices validation
  5. Distribute e-Invoices to customers and display in mobile/web app
  6. E-Invoices rejection and cancellation
  7. Reporting and dashboard

TimeTec E-Invoicing Solution will be available by 1st January 2025.