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Exploring eInvoicing implementation options in Malaysia

eInvoicing is a crucial aspect of modern business operations, streamlining financial transactions and ensuring compliance with tax authorities. In Malaysia, businesses of varying sizes must adopt eInvoicing based on their revenue levels. In this short read, we'll explore the essentials of eInvoicing, including validation processes, unique identifiers, and compliance requirements.

The Access Blog

Posted 16/04/2024

eInvoicing header

The basics of eInvoicing implementation

1. Validation process: Transmitting to LHDN

  • At the core of eInvoicing implementation lies the need to transmit every accounting transaction to the Malaysian Inland Revenue Board (LHDN) for validation.
  • Once validated, businesses receive a Unique Identifier Number for the invoice.

2. QR code integration

  • Alongside the Unique Identifier, businesses must embed a QR code into their electronic invoices.
  • This QR code facilitates easy access to invoice details and enhances efficiency.

Options for adopting eInvoicing

Businesses have three main options for adopting eInvoicing:

MyInvois Portal

  • Free for All Businesses
  • Use the MyInvois Portal to generate invoices and validate them simultaneously.
  • Ideal for small and medium-sized enterprises (SMEs).

2. Accounting software integration

  • Software-based validation
  • Acquire accounting software capable of converting invoices into a format validated by LHDN.
  • The software will automatically include the Unique Identifier Number and QR code.
  • Additional features may vary based on the chosen software.

3. Peppol eInvoicing

  • For business partners
  • Both parties (your business and your partners) must be registered for Peppol.
  • Implement Peppol Ready solutions (not necessarily the same product).
  • Includes transmission of invoices to LHDN for validation.

Key considerations

1. Validation by LHDN

  • Regardless of the chosen option, LHDN validation is essential for official eInvoices.

2. Accurate computation

  • Pay attention to correct computation, especially regarding the Service and Sales Tax
  • Software vendors often provide built-in checks to ensure accuracy.

3. Industry-specific rules

  • Different industries may have additional rules and guidelines.
  • For retail businesses (where invoices are not typically issued), consider consolidating receipts for LHDN validation.
  • Be aware of file size limits and row counts, which software should handle efficiently.

Conclusion

eInvoicing is a transformative step toward efficiency and compliance. Choose the right approach for your business, validate your invoices with LHDN, and ensure accurate computations. By embracing eInvoicing, you contribute to Malaysia's digital economy and streamline financial processes.

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