Challenges and opportunities

The introduction of e-Invoicing in Malaysia

Breaking News: Deadlines postponed because of the pandemic

In the context of the ongoing pandemic, the Customs Department in Malaysia has now extended the deadlines for filing and payment of sales and service tax. This measure was decided due to political tensions and the deteriorating investment environment. In 2015, a “Goods and Services Tax” was already introduced in Malaysia, which was withdrawn in 2018. Instead, there has been a “Sales and Services Tax” since then.

In the meantime, however, many are again demanding the “Goods and Services tax” back. Deadlines for the May-June 2021 quarter have been moved from July 31 to Aug. 31. For those companies that take advantage of the deadline extension, there will be no further interest or penalties.

The electronic invoicing in Malaysia

In early 2015, Malaysia introduced GST legislation to support indirect taxation. This legislation also includes the issuance of electronic invoices, which have been permitted since that time but are not yet mandatory. Written consent is required to issue an e-invoice, as well as a digital signature to ensure authenticity and integrity.

Electronic invoices must be stored for 7 years from the date of issuance of the last document related to the invoice. Storage overseas is permitted if approved by Royal Malaysian Customs.

The implementation of electronic invoicing brought both challenges and opportunities:

Challenges

Resistance of the labor market

Malaysia, like many other Asian countries, suffers from overpopulation. New jobs have to be created all the time, and the switch to electronic invoices means even more jobs will be lost, as processing is no longer done manually, but instead technology is used for this purpose.

Budgetary constraints

Implementing e-invoicing is expensive, yet investments are needed to increase the value chain. However, invoice processing causes delays and costly errors appear.

Opportunities

Advantages of the pioneer

Those who take advantage of the new electronic invoicing option and implement it quickly will gain a competitive advantage.

Positive effects on the cost of working capital

By automating and processing invoices electronically, the risk of error is very low, and unnecessary costs are saved that could occur with manual processing. In addition, e-Invoicing improves payment times and provides liquidity where it is urgently needed.

Scalable and easy to train

With manual invoicing, employees need to be trained and educated accordingly, which costs time. With electronic invoices, it is not the processes themselves that need to be trained, only the tasks that need to be completed.

Malaysia is on the move and wants to expand the e-Invoicing network even further. The country also plans to join the PEPPOL network, as do many other countries.

This might also interest you:

In our article you will find information about the creation of electronic invoices with PEPPOL in Singapore.

You would like to digitize? Then contact us now!

We are happy to be there for you – by phone, by e-mail, or personally at your site!

Muzaffer Havcarci der INPOSIA Geschäftsführer und ihr Ansprechpartner für e-Invoicing und weitere INPOSIA Lösungen.

Muzaffer Havcarci
INPOSIA e-Invoicing-Specialist

+ 49 721 50 955 0
info@inposia.com

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