Malaysia is entering a new era of taxation with the implementation of the e-invoice system, a major milestone in the country’s digital transformation journey. The move, part of the government’s mission to build a vibrant and transparent digital ecosystem, is set to redefine the landscape of tax administration. With the successful rollout of Phase 1, which targeted large businesses, all eyes are now on Phase 2. From 1 January 2025, taxpayers with an annual income between RM25 million and RM100 million will join the digital revolution, paving the way for nationwide adoption. Mid 2025.

What is e-invoice? Understanding the system

An e-invoice is a digital document that contains transaction information between sellers and buyers, including item descriptions, prices, quantities and tax details. Phase 1, which was launched on 1 August 2024, made its use mandatory for businesses with a turnover of more than RM100 million. This is consistent with the 12th Malaysia Plan, which emphasizes digital transformation as a catalyst for economic growth.

As Phase 2 approaches, businesses in the next income tier should prepare to integrate e-invoice systems, a move that not only ensures compliance but also enhances operational efficiency and transparency in tax matters. is

Comprehensive support from HASiL

The Inland Revenue Board of Malaysia (HASiL) is committed to ensuring a smooth transition for all taxpayers. Through a number of initiatives, businesses are provided with the tools and resources to seamlessly adopt e-invoices.

Key supporting measures include:

• MyInvois Portal: A free platform enabling e-invoice submission, profile management, and batch uploads.
• MyInvois Mobile App: Offers on-the-go convenience for businesses to issue e-invoices anytime, anywhere.
• SDK and API integration: Advanced users can customize their systems for smooth operations.

HASIL has also conducted over 800 nationwide engagement sessions to address taxpayer concerns and provide hands-on guidance.

Transition made flexible: the benefits of a grace period

Understanding the challenges faced by businesses, HASIL has introduced a grace period of six months. During this time, taxpayers can consolidate transactions into monthly e-invoices, offering much-needed operational flexibility as they adapt to the new system.

Dealing proactively with challenges

Feedback from taxpayers has highlighted concerns regarding difficulty in obtaining required information from other parties for issuance of e-invoices. To address this, the government has proposed an amendment in Budget 2025 to allow taxpayers to search for Tax Identification Number (TIN) through a dedicated platform provided by HASIL.

Data Security: The Cornerstone of Trust

In the digital age, data security is paramount. HASiL uses strong security measures to protect sensitive taxpayer information. Adhering to international standards, the system ensures secure transactions, giving taxpayers confidence in its reliability and compliance with data protection regulations.

Incentives to promote adoption

To reduce the financial burden on businesses, especially micro, small and medium enterprises, the government has introduced tax incentives. These include deductions for purchase of ICT equipment and capital allowances for consultancy fees related to e-invoice implementation. Such initiatives aim to accelerate adoption while reducing costs.

Preparing for the Digital Leap

Taxpayers preparing for Phase 2 can take the following steps:

1. Educate your team: Familiarize employees with e-invoicing requirements and guidelines.
2. Upgraded systems: Ensure that the accounting software meets the e-invoice specifications.
3. Use HASIL support: Get support from the e-invoice help desk via live chat and dedicated agents.
4. Plan ahead: Align internal processes with e-invoice requirements for a seamless transition.

A leap into the digital future

The e-invoice initiative is more than a compliance initiative – it represents a significant step towards operational efficiency, transparency and economic growth. With comprehensive support, incentives and a phased rollout, taxpayers are well positioned to embrace this change.

As Malaysia moves into Phase 2, collaboration between businesses, government and other stakeholders is critical to the success of this digital journey. Together, we can achieve a stronger, more inclusive and efficient economy.

The future of tax is here. Join the revolution, embrace e-invoicing and move your business into the digital age with confidence.

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