In the government’s continuous efforts to advance tax governance in Malaysia, the Inland Revenue Board of Malaysia (HASiL) recently released the e-invoicing guidelines, Version 1.0. With mandatory enforcement beginning in June 2024 for businesses that record a sales threshold of RM100 million per year and January 2027 for all businesses, this initiative also seeks to enhance tax compliance and address tax leakages resulting from the shadow economy.

Drawing upon key takeaways from a roundtable discussion at the National Tax Conference 2023 (NTC) and supported by an online poll that KPMG conducted beforehand, it was found that 69% of 238 poll respondents are unprepared for the oncoming implementation of e-invoicing in Malaysia. This could be due to various reasons – ranging from expenses, time consumption and delivery, a lack of resources, to its complexity for organizations. Despite the availability of the 55-page e-invoicing guidelines, more time and clarification are required to address certain aspects of the guidelines – and, until such clarifications are obtained, taxpayers are unlikely to be fully ready for implementation.

This sentiment was explored in a recent webinar KPMG organized to dive deep into Malaysia’s transition towards e-invoicing. The forum featured Dr. Rasyidah Che Rosli (Director of the Tax Operations Department, HASiL) and Mr. Song Hock Koon (Vice President of Digital Trade, MDEC); together with insights shared by Alvin Gan (Head of Technology Consulting, KPMG in Malaysia), the forum revealed that organizations in Malaysia are capable of embracing this transition – perhaps better than some expect.

This panel of specialists also provided these recommendations for businesses preparing for the next step forward:

  • Taxpayers need to conduct self-assessments of their current system to recognize its limitations and invest where required to improve its workflow accordingly.
  • Businesses should analyze their accounting software(s) and determine its compliance with international standards to minimize operational disruptions.
  • For readiness in change management, businesses should consult with their professional tax consultants and continue engaging with HASiL to achieve a smooth transition towards e-invoicing compliance.

Watch the webinar with guest speakers from HASiL and MDEC in full, covering Malaysia’s e-invoicing guidelines v1.0: