In its continuous effort to ensure smoother compliance with the tax requirements, the Inland Revenue Board of Malaysia (HASiL) has postponed its mandatory e-Invoicing implementation by six (6) months.
This announcement has been welcomed by businesses especially those hailing from complex industries as the delay will now provide much needed flexibility and sufficient time to prepare and adapt the current system under the upcoming e-Invoicing mandates.
Broadly speaking these mandates require businesses:
- To issue consolidated e-Invoices for all transactions including self-billing e-Invoices,
- To enable any transaction descriptions to be included in the "Product or Service Description" field,
- To issue, upon a request from the buyer, only a consolidated e-Invoice without issuing an e-Invoice for each transaction.
HASiL's announcement not only provides additional time for taxpayers to acclimatize to the changes but also provides the following reliefs/benefits:
- Within these six (6) months period, no taxpayer will be prosecuted under section 120 of the Income Tax Act 1967 for non-compliance with e-Invoicing regulations, provided that taxpayers comply with the consolidated e-Invoice requirements as mentioned above.
- For those taxpayers who successfully implemented e-Invoices as per the previous timeline of August 2024, will be allowed a reduction in the capital allowance claim period from three (3) years to two (2) years for the purchase of ICT equipment and computer software packages effective from the Assessment Year (AY) 2024 to AY 2025.
With this announcement, it will be interesting to see how the businesses will farewell with the additional time provided and in remaining consistent with the tax compliances in the region.
For more details, read through HASiL's official press release here.
Please note the above is an unofficial English translation of some parts of the press release issued by HASiL.
Action Required:
Businesses are advised to utilize the additional time by ensuring effective communication with the buyer for the required changes in relation to the consolidated e-Invoices and proactively conduct a diagnostic review of the historical tax and invoicing compliance eco-system. This is to be done with the aim to identify and resolve any persisting gaps or system pain points to achieve operational efficiency and legal requirements as per the e-Invoice mandate.
Originally published 26 July 2024
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