E-Invoicing in Malaysia | E-Invoicing Data Fields | E-Invoice Schema

Note:

A 6-month relaxation period is provided by IRBM for all phases.
Exemption provided for taxpayers with annual turnover or revenue below MYR 150,000.

e-Invoice Standard: Format and Data Fields

e-Invoices are the new standard for business transactions in Malaysia. These digital receipts act as a secure and verifiable record between a seller/issuer and a buyer/receiver.

Instead of relying on physical documents, e-Invoices allow businesses to generate and store invoices in a digital format. This translates to faster billing, smoother payments, and streamlined record-keeping for reconciliation.

The Inland Revenue Board of Malaysia (IRBM) has established a specific standard for e-Invoices. These can be created in either XML or JSON format and must contain a minimum of 55 mandatory and optional mandatory data fields to ensure all the necessary information is captured for validation.

By dictating the format and data fields that must be included in an e-Invoice, the Malaysian e-Invoice standard ensures consistency, and facilitates seamless exchange of information between businesses for efficient, near real-time processing by the Inland Revenue Board of Malaysia (IRBM). The IRBM, through its MyInvois platform

Issuers need to also keep a note of the following:

• If a buyer/supplier specifically requests an e-Invoice, the taxpayer/issuer may comply or choose not to issue individual e-Invoice or individual self-billed e-Invoice, provided that the taxpayers comply with the IRBMs Specific Guideline (3.0), Section 16.
• The supplier will need to issue the e-Invoice in either XML or JSON format.

Impact of Implementing the e-Invoice Standard

• Enhanced Efficiency: Standardized data fields allow for automated processing of invoices, significantly reducing manual data entry and streamlining tax compliance.
• Improved Transparency: e-Invoices provide a clear and auditable record of transactions, fostering greater transparency between businesses and the government.
• Reduced Errors: Standardized formats minimize the risk of errors during data entry, leading to more accurate tax reporting.
• Cost Savings: Automation through e-Invoicing can translate into significant cost savings for businesses by reducing manual processing time and resources.

e-Invoice Schema: The Backbone of Data Exchange

The e-Invoice schema defines the specific data fields that must be included in an e-Invoice, along with their technical specifications. This ensures all e-Invoices adhere to a consistent structure, enabling seamless exchange and processing.

The Official e-Invoice Schema in Malaysia, categorized as mandatory and optional mandatory. Here’s a breakdown of the key aspects:

• Mandatory Data Fields (38): These fields represent crucial information that must be included in every e-Invoice. They encompass details like:
  a. Seller and Buyer Information: Company name, registration number, address, contact details.
  b. Invoice Details: Invoice number, date of issue, due date.
  c. Tax Information: Tax type, tax amount.
  d. Product or Service Details: Description, quantity, unit price, tax rate, total amount.
  e. Document Details: Document Number, Type (Invoice/Credit/Debit/Refund), Document Currency Code, Original Document No., Original e-Invoice Reference No., Currency Exchange Rates
• Optional Data Fields (17): These fields provide additional details that suppliers can choose to include in their e-Invoices, such as:
  a. Payment Details: Payment method, bank details (if applicable).
  b. Delivery Details: Shipping Recipient Name, Recipient TIN, Recipient Registration/Identification Type, Recipient Registration/Identification Number. 
  c. Additional Export and Import information. 

Changes to the e-Invoicing Schema

The IRBM has introduced multiple revisions to the schema over the past few months. These changes were driven by: requirements.

• Tax Regulation Updates: In the future, changes in tax laws and regulations might necessitate further adjustments to the schema to capture relevant tax information.

Benefits of a Standardized e-Invoice Schema

• Interoperability: The standardized schema allows for seamless exchange of e-Invoices between different accounting and business systems, fostering smooth communication between buyers and sellers.
• Reduced Complexity: Businesses can leverage readily available e-Invoicing middleware solutions that comply with the official schema, simplifying the implementation process.
• Improved Data Accuracy: Standardized data fields minimize the risk of errors during information exchange, ensuring accurate tax reporting.

Changes to the e-Invoice Schema

While the core data fields remain largely consistent, the IRBM may introduce minor revisions to the schema to adapt to evolving business needs or tax regulations. Businesses are advised to stay updated with any official announcements regarding schema changes.

Conclusion

e-Invoicing in Malaysia represents a significant step towards a more digitized and efficient tax administration system. Understanding the e-Invoice standard and the official schema is crucial for businesses to ensure compliance and reap the benefits of this initiative. As the implementation progresses, staying updated on any schema revisions and utilizing compliant e-Invoicing solutions will be key for a smooth transition.