Home Business Advise E-INVOICE IMPLEMENTATION IN MALAYSIA:FROM THE DENTAL INDUSTRY PERSPECTIVE
Business Advise

E-INVOICE IMPLEMENTATION IN MALAYSIA:FROM THE DENTAL INDUSTRY PERSPECTIVE

A. OVERVIEW

To support the growth of the digital economy, the Government intends to implement e-Invoice in stages in an effort to enhance the efficiency of Malaysia’s tax administration management. It is in line with the Twelfth Malaysia Plan, where the focus is on strengthening the digital services infrastructure and digitalising the tax administration.

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, and debit notes. An e-Invoice contains the same essential information as a traditional document, for example, supplier’s and buyer’s details, item description, quantity, price excluding tax, tax, and total amount, which records transaction data for daily business operations.

The e-Invoice will enable near real-time validation and storage of transactions, catering to Business-to-Business (B2B), Business-to-Consumer (B2C) and Business-to-Government (B2G) transactions.

B. E-INVOICE IMPLEMENTATION TIMELINE

E-Invoice will be implemented in phases to ensure smooth transition. The roll-out of e-Invoice has been planned with careful consideration, taking into account the turnover or revenue thresholds, to provide businesses with sufficient time to adapt. Below is the mandatory e-Invoice implementation timeline:

In addition, the Government has announced an exemption for micro, small, and medium-sized enterprises (MSMEs) with an annual turnover or revenue below RM150,000 from the requirement to issue e-Invoices.

To aid in the smooth transition to e-Invoice, the Government has also approved a six-month interim relaxation period following the commencement date of each phase. This interim relaxation period, starting from the respective dates of mandatory e-Invoice implementation, was established on 26 July 2024.

C. BENEFIT OF E-INVOICE IMPLEMENTATION

The implementation of e-Invoice not only provides a seamless experience to taxpayers, but also improves business efficiency and increases tax compliance. Overall benefits include:
1. Unified invoicing process through the streamlining of transaction document creation, and submission of data electronically to IRBM. The automation of data entry for transactions reduces manual efforts and human errors;
2. Facilitate tax return filing through seamless system integration for efficient and accurate tax reporting;
3. For larger businesses, the adoption of e-Invoice enables the streamlining of operations, resulting in enhanced efficiency and significant time as well as cost savings through automated processes, seamless data integration, and improved invoice management; and
4. For micro, small and medium-sized enterprises (MSMEs), the phased implementation offers a progressive and manageable transition to e-Invoice, allowing MSMEs to align their financial reporting and processes to be digitalised with industry standards, ensuring that MSMEs adapt over a longer period and mitigating potential disruptions.
By Dr. Rasyidah Che Rosli

D. OVERVIEW OF THE E-INVOICE MODEL

To facilitate the transition to e-Invoice, taxpayers can select the most suitable mechanism to transmit e-Invoices to IRBM, based on their business requirements and specific situation.

There are two (2) options for the e-Invoice transmission mechanisms for taxpayers selection:
i. MyInvois Portal
The MyInvois Portal is an e-invoicing solution provided by IRBM at no charge. This platform is designed to facilitate the implementation of e-Invoice for all taxpayers especially for those who are not using the business ERP system to issue e-Invois. Accessible via computers, laptops, and smartphones, the portal enables users to manage e-Invoice efficiently from anywhere, at any time.

ii. Application Programming Interface (API)
• An API is a set of programming code that enables direct data transmission between the taxpayers’ system and MyInvois system
• Requires upfront investment in technology and adjustments to taxpayers existing systems
• Ideal for large taxpayers or businesses with substantial transaction volumes

E. E-INVOIC OVERVIEW WORKFLOW

The figure below demonstrates an overview of the e-Invoice workflow, starting from the point at which a sale is made or transaction is initiated, and an e-Invoice is issued by the supplier via MyInvois Portal or API, up to the point of storing validated e-Invoices on IRBM’s database for taxpayers to view their respective historical e-Invoices.

F. E-INVOICE FROM THE PRESPECTIVE OF DENTAL INDUSTRY

In general, the e-invoice process for the dental industry shares similarities with all other industries. Kindly refer to the e-Invoice General Guideline and Specific Guideline published by IRBM (Guidelines | Lembaga Hasil Dalam Negeri Malaysia) to understand the scope of implementation of the e-Invoice and further guidance on the issuance of e-Invoice relating to the specific areas. In addition, IRBM has also published a Specific FAQ for the healthcare industry’s reference (Healthcare Industry Specific FAQs).

Generally, e-Invoice is required to be issued upon buyers’ requests. In the event that buyers do not request an e-Invoice, the supplier (in this instance, the dentist) is allowed to continue issuing receipts to the buyers. Subsequently, the supplier is required to aggregate all receipts and issue a consolidated e-Invoice for IRBM’s validation within seven (7) days from month end.

In the scenario where dental clinics engage locum dentists and nurses to fulfill temporary resource needs, the e-Invoice treatment would depend on the contract entered (e.g., contract for service or contract of service). Where the locum doctors and nurses have entered into contracts for service with hospitals, the respective locum doctors and nurses are required to issue an e-Invoice to the hospitals. Where the agency representing the locum doctors and nurses have entered into a contract for service with hospitals, the agency is required to issue an e-Invoice to the hospitals.

Furthermore, where the locum doctors and nurses have entered into a contract of service with hospitals, the fees are considered as part of an employment income. Currently, this is being exempted from the issuance of e-Invoice as per the e-Invoice General Guideline. Kindly note that the exemptions are subject to periodic review and updates.

For rental paid for the dental clinic, e-Invoice treatment would be dependent on the status of the landlord:
• If the landlord is a business or an individual conducting business, the landlord is required to issue an e-Invoice to the dental clinic.
• If the landlord is an individual not conducting business, the dental clinic is required to issue a self-billed e-Invoice for the rental paid.

For any deposit collected from buyers, the e-Invoice treatment are as follows:
• If the deposit is refundable in nature, no e-Invoice is required to be issued.
• If the deposit is non-refundable in nature or later has become non-refundable (e.g., forfeited), e-Invoice is required to be issued upon collection of such payment / at the point when the deposit become non-refundable.

If dental clinics provide free services to its staff as employment benefits, dental clinics may continue issue Nil amount e-Invoice (if currently issuing invoice to record the services provided). Otherwise, dental clinics are not required to issue e-Invoice for these transactions.

Should you have any questions or require further assistance, please reach out to us through:
Helpdesk: 03-8682 8000 (24/7 hotline)
General Queries: myinvois@hasil.gov.my
SDK Queries: email to helpdesk-myinvois@hasil.gov.my or submit form to https://feedback.myinvois.hasil.gov.my

Dr. Rasyidah Che Rosli
Director of E-Invoice Division
Tax Operations Department
(Lembaga Hasil Dalam Negeri
Malaysia)

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