Exemptions in e-Invoice Generation as per LHDN Guidelines
In the digital age, as Malaysia embraces the era of electronic invoicing (e-invoicing), businesses and individuals need to stay informed about the regulations and exemptions surrounding this transformative shift.
The recent E-Invoice Guideline released by the Inland Revenue Board of Malaysia (IRBM) sheds light on exemptions from implementing e-invoices. Let's explore these exemptions in detail and understand their implications.
Who is Exempted?
The guideline outlines specific categories of individuals and entities currently exempted from issuing e-invoices. These include:
- Ruler and Ruling Chief
- Former Ruler and Ruling Chief
- Consort of a Ruler of a State with specific titles
- Consort of a Former Ruler of a State with specific titles
- Government
- State government and state authority
- Government authority
- Local authority
- Statutory authority and statutory body
- Facilities provided by the government or authorities (e.g., hospitals, clinics)
- Consular offices and diplomatic officers, consular officers, and consular employees
What to keep in mind?
- (1.6.2) Exempted entities are not required to issue e-invoices, including self-billed e-invoices. Receipts, bills, or invoices issued traditionally would be considered proof of expenses for tax purposes.
- (1.6.3) Suppliers providing goods or services to exempted entities are required to issue e-invoices as per the stipulated implementation timeline.
- (1.6.4) For transactions with exempted entities, Suppliers can replace the Buyer's details with the information specified in the e-Invoice Specific Guideline.
- (1.6.5) The exemption only applies to the mentioned entities; any entities owned by them are still required to implement e-invoicing.
- (1.6.6) Despite the exemption, the mentioned entities are encouraged to adopt e-invoicing, supporting the government's digital initiative.
- (1.6.7) Certain types of income or expenses are exempted from e-invoicing requirements, including employment income, pension, alimony, distribution of dividends in specific circumstances, zakat, and scholarships.
Conclusion,
As Malaysia continues its digital transformation journey, businesses and individuals need to stay informed about e-invoicing regulations and exemptions. The guidelines provide clarity on who is exempted,
In conclusion, while exemptions provide relief for certain entities and transactions, the overarching goal is to streamline and enhance the efficiency of business transactions through e-invoicing. Staying updated on the guidelines ensures a smooth transition into Malaysia's digital future, aligning with global trends in electronic financial transactions.