Types of transactions

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e-Invoicing – what types of transactions are affected?

With the implementation of e-Invoicing, all sales related transactions will need to be submitted to the LHDN portal for validation.

This includes:

  • Invoices
    All invoices that you issue for services and/or sale of goods
  • Credit notes
    If you issue a credit note to your customer for return of goods, to discount or cancel an invoice.
  • Debit notes
    A debit note is issued to increase an invoice amount either to correct an error on the invoice or for additional charges related to that invoice.
  • Refunds
    Payment of refunds to customer. This is usually for when a customer overpays, or for refund of deposits, etc.

Expense claims by employees

An e-Invoice is required for expense claims by employees.

The e-invoice can be made out to either the company or the employee.

However, if the e-invoice is in the name of the employee, then the expense being claimed must be explicitly allowed for in the contract of employment.

Purchases from overseas suppliers

In addition, purchases from overseas suppliers for both goods and services will need to go through the validation process.

This is done through self billing, which involves submitting to LHDN for validation.

What’s not included?

e-Invoice is not required for:

  • employment income,
  • pensions,
  • alimony,
  • distribution of dividend in specific circumstances,
    LHDN states:
    Taxpayers who are not entitled to deduct tax under Section 108 of the Income Tax Act 1967 as well as taxpayers who are listed on Bursa Malaysia will be exempted from issuing self-billed e-Invoice on dividend distribution.
    Correspondingly, their shareholders are not required to issue an e-Invoice for proof of income.
  • zakat,
  • scholarships. (excluded from this list by LHDN in their guideline v2.3 released on 6th April 2024)

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This post is also available in: Bahasa Melayu

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