(electronic invoicing system)

Malaysia accelerates e-invoicing implementation post 2024 budget announcement

In the wake of the 2024 budget release, the adoption of electronic invoicing system (e-invoicing) emerges as a top national priority.

LHDN's strategic move: e-invoicing policy to roll out in 2024

The Inland Revenue Board (LHDN) is set to spearhead the e-invoicing implementation in 2024. Initial implementation targets companies with an annual turnover exceeding RM 100 million, propelling Malaysia into the era of electronic invoicing.

Understanding e-invoicing: a digital transformation

E-invoicing, or electronic invoicing, refers to the electronic issuance, collection, and storage of receipts and payment vouchers in various business transactions. The Malaysian government is set to fully implement this system, progressively phasing out traditional paper or electronic documents such as invoices, return vouchers, fee vouchers, and more.

E-invoices mirror their traditional counterparts, featuring essential details such as buyer and seller information, transaction specifics, etc. The distinction lies in the electronic storage of all transaction records within LHDNM.

Insights and preparation steps for a seamless e-invoicing implementation

Key preparation insights from Monitor:

When will e-invoicing be implemented? 

The phased implementation of e-invoicing, mandatory for businesses based on their turnover, has witnessed an extension for larger enterprises. Taxpayers with an annual income exceeding RM 100 million now have until August 1, 2024, to officially start the implementation.

According to the October 13, 2023 budget, the implementation date for all other businesses has been advanced by 18 months. The original date of 2027's 1st month is now rescheduled to July 1, 2025.

Timeline of e-invoicing implementation from Monitor
  • Monitor is collaborating with MDEC on a pilot run project. The pilot kick-off is scheduled for November 2023 and the Ready to Transact is expected to go live in Q1 2024.
  • Monitor's planned rollout of e-invoicing to Malaysian customers in Q2 2024 after the completion of the pilot run project.
  • Engaging with customers for Monitor e-invoicing functionality, implementation, settings, and training in Q2 2024.
  • Monitor e-invoicing implementation cost: there will be an initial investment cost for implementation and training of Monitor e-invoicing in existing Monitor ERP system.
  • E-Invoicing transaction fees: pending LHDNM's future announcements and guidelines.

Summary: phased implementation

  • Phase one: For Monitor customers/taxpayers with an annual income surpassing RM 100 million, scheduled to commence from August 2024.
  • Phase two: For Monitor customers/taxpayers with an annual income between RM 25 million and RM 100 million, scheduled from Jan 2025.
  • Phase three: For all Monitor customers/taxpayers with an annual income less than RM 25 million, set to begin from July 2025.

Mandatory education for enterprises

  • E-invoicing is now a mandatory course for every enterprise/taxpayer. Connect with the Monitor sales team to learn about the rules and details of this system well in advance of the official implementation dates outlined above.

Source: Malaysia Digital Economy Corporation. (n.d.). National E-invoicing Initiative. Retrieved from https://mdec.my/national-einvoicing

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