E-Invoicing in Malaysia | E-Invoicing Data Fields | E-Invoice Schema
August 13, 2024
E-Invoicing in Malaysia: Everything you need to know
September 5, 2024E-Invoicing in Malaysia: Important Terms You Must Know
This article explains essential terms and tools for businesses in Malaysia, adopting e-Invoicing. It covers APIs, transaction types, and financial documents like invoices, credit notes, refund notes, and debit notes, helping businesses navigate digital invoicing efficiently and comply with government regulations.
Core Concepts
- API (Application Programming Interface): Think of an API as a messenger that facilitates delivery of specific requests and responses between different applications. It acts as a bridge, allowing different programs to communicate and share data without needing to know the internal workings of each other, through a set of definitions and protocols, to ensure compatibility and security.
- B2B (Business-to-Business): This refers to commercial transactions and relationships between businesses. It encompasses everything from raw material suppliers to service providers, wholesalers, and distributors engaging in trade with other companies.
- B2C (Business-to-Consumer): This involves the sale of products or services directly to consumers, typically through retail outlets, online stores, or other channels.
- B2G (Business-to-Government): This describes commercial interactions between businesses and government entities. It includes contracts, bids, and the provision of goods or services to government departments/agencies/offices.
Financial Documents
- Credit Note: This document is issued by a seller to a buyer representing the credit of funds to the buyer’s account against any billing errors, such as an overcharge or return of goods. This can also be used to reduce payment on unpaid invoices or adjust future payments based on mutual understanding between the seller and the buyer.
- Debit Note: The opposite of a credit note, a debit note is used to increase the amount owed by a buyer to a seller with reference to goods previously sold. This might occur due to additional charges, such as late fees, extra services, or price adjustments. It can also represent a formal request for a credit note from the buyer against the return of purchased goods or services.
- Invoice: A detailed document issued by a seller to a buyer, outlining the goods or services provided, quantities, prices, taxes, and total amount due. It serves as a formal request for payment.
- Refund Note: A document confirming that a customer has received a refund for returned goods or canceled services. It details the amount refunded and the reason for the return.
Systems and Standards
- ERP (Enterprise Resource Planning): A software system that integrates various business functions, such as finance, human resources, supply chain management, and customer relationship management. It provides a centralized view of operations and improves efficiency.
- MyInvois Portal: A web-based platform designed by LHDN, specifically for taxpayers to manage their e-Invoicing obligations. It simplifies tasks like generating, submitting, and tracking electronic invoices.
- MyInvois System: The underlying technology that supports the MyInvois Portal. It handles the electronic exchange of invoices between businesses, ensuring compliance with e-Invoicing regulations.
- QR Code (Quick Response Code): A two-dimensional barcode that can store a variety of information, from website URLs to contact details. It is widely used for marketing, payments, and data sharing.
- SGML (Standard Generalized Markup Language): A complex system for defining document structures, used primarily for large-scale electronic publishing projects. It provides a framework for creating custom markup languages to describe document content.
- SST (Sales and Service Tax): A consumption tax imposed on the sale of goods and services within a specific jurisdiction. It is a common form of indirect taxation.
- XML (Extensible Markup Language): A text-based format for representing data with a clear structure. It is widely used for data exchange and storage due to its flexibility and human-readability.
- UBL2.1 (Universal Business Language Version 2.1): An international standard for structuring business documents in electronic form. It provides a common language for exchanging invoices, purchase orders, and other commercial documents.
- XSD (XML Schema Definition): A language for describing the structure of XML documents. It defines the elements, attributes, and data types allowed in an XML document, ensuring consistency and data integrity.
