As Malaysia moves forward with its nationwide electronic invoice initiative, cross-border sellers—particularly those operating on platforms like TikTok Shop—must prepare for significant changes to their business operations starting in 2024. The new e-invoicing system aims to enhance tax transparency and compliance while combating tax evasion. Are you ready for this regulatory shift?
Understanding the Implementation Timeline
The Inland Revenue Board of Malaysia will roll out the e-invoice requirement in four phases:
- August 1, 2024: Mandatory for taxpayers with annual revenue exceeding 100 million Malaysian ringgit (MYR)
- January 1, 2025: Applies to businesses with annual revenue of 25 million MYR or more
- July 1, 2025: All eligible taxpayers must comply
Key Requirements for E-Invoices
Under the new regulations, the following documents must be issued electronically:
- Sales and purchase invoices (including self-billed invoices)
- Credit notes for supplier price reductions
- Debit notes for additional charges
- Refund documents
Format and Submission Methods
All e-invoices must be submitted in either XML or JSON format using Universal Business Language (UBL 2.1). Sellers can upload documents through the MyInvois portal or via API integration.
Required Data Fields
Valid e-invoices must include comprehensive details such as:
- Complete supplier and buyer information
- Detailed descriptions of goods/services
- Quantities and unit prices (excluding tax)
- Tax amounts and total charges
Accuracy and completeness of this information is mandatory for compliance.
Preparing for Compliance
To ensure smooth adoption of the new system, sellers should:
- Invest in training: Educate staff about e-invoicing requirements to prevent unintentional violations
- Seek professional guidance: Consider hiring specialists to handle e-invoice compliance matters
Managing Account Risks
Failure to submit e-invoices within required timeframes may result in account restrictions or suspensions, potentially freezing seller balances and disrupting cash flow. Businesses must monitor platform notifications closely and update their systems promptly to meet the new requirements.
The Road Ahead
While the e-invoice system presents initial challenges, it promises long-term benefits including improved tax transparency, streamlined processes, and a more robust business environment. Sellers who proactively adapt to these changes will be better positioned to thrive in Malaysia's increasingly competitive e-commerce landscape.