26/07/2024
A Press Statement issued by the Inland Revenue Board of Malaysia (HASIL) on 26 July 2024 outlines a temporary relaxation of e-invoice requirements for taxpayers during the initial implementation period.
Here's a summary of the key points:
1. Relaxation Period:
- A six-month grace period from the mandatory implementation date of e-Invoice
2. Consolidated e-Invoices:
- All activities/industries are allowed to issue consolidated e-Invoices, including self-billed e-Invoices.
3. Flexibility in Description:
- Any transaction description can be entered in the "Product or Service Description" field.
4. Buyer Requests:
- Even if a buyer requests an e-Invoice, sellers can issue a consolidated e-Invoice instead of individual transaction e-Invoices.
5. No Prosecution:
- During this six-month period, there will be no prosecution under Section 120 of the Income Tax Act 1967 for non-compliance with e-Invoice rules, provided taxpayers comply with the consolidated e-Invoice requirements.
6. Incentive for Early Adopters:
- Businesses that implement e-Invoicing according to the original timeline (without using this relaxation) will benefit from a reduction in the capital allowance claim period from three years to two years for ICT equipment and computer software packages, effective from the Year of Assessment 2024 to 2025.
Examples to explain these points:
1. Consolidated e-Invoices:
Example: A retail store that typically issues hundreds of invoices daily can now issue one consolidated e-Invoice at the end of each month, summarising all transactions.
2. Flexibility in Description:
Example: A service company can use general descriptions like "Professional Services - July 2024" instead of detailing each specific service provided.
3. Buyer Requests:
Example: If a business customer requests an individual e-Invoice for a specific purchase, the seller can still include this transaction in their monthly consolidated e-Invoice.
4. No Prosecution:
Example: If a company makes minor errors in their e-Invoice implementation during the first six months, they won't face legal consequences as long as they're making a good faith effort to comply with the consolidated e-Invoice requirements.
5. Incentive for Early Adopters:
Example: A company that fully implements e-Invoicing by the original deadline can claim capital allowances for new accounting software over two years instead of three, potentially reducing their tax liability faster.
This relaxation aims to give businesses more time to adapt to the e-Invoice system while encouraging its adoption.
It recognizes the challenges faced by businesses, especially those in complex industries, in implementing the new e-Invoice requirements.
