In the world of digital transactions, e-Invoices have become a crucial part of business operations. However, there are instances where a buyer may not require an e-Invoice. In such cases, the supplier can issue a normal statement or bill to the buyer, similar to the current business practice.

The supplier is allowed to aggregate these statements or bills to create and submit a consolidated e-Invoice for validation by the Inland Revenue Board of Malaysia (IRBM) in accordance with the current issuance period for statements or bills for the respective businesses.

Upon aggregation of statements or bills, the supplier is required to create and submit a consolidated e-Invoice to IRBM for validation, within seven calendar days after the end of the billing period.

The Process of Issuing a Consolidated e-Invoice

Here are the steps involved in the issuance of a consolidated e-Invoice when a buyer does not require an e-Invoice:

  1. The supplier seeks confirmation from the buyer if an e-Invoice is required.
  2. If the buyer confirms that no e-Invoice is required, the supplier continues to issue a statement or bill to the buyer, as per the current business practice.
  3. Within seven calendar days after the end of the period, the supplier retrieves all the statements or bills issued for the previous billing period and issues a consolidated e-Invoice as proof of the supplier’s income and expense.
  4. The supplier issues the consolidated e-Invoice as per the required fields outlined in Appendices 1 and 2 of the e-Invoice Guideline.

The process of issuing a consolidated e-Invoice is similar to the e-Invoice workflow with one exception: once the consolidated e-Invoice has been validated, IRBM will send a notification to the supplier only.

The validated e-Invoice will serve as the supplier’s proof of income and expense, and it is not required to be shared with the buyer.

Information Required in the Consolidated e-Invoice

The information required to be included in the consolidated e-Invoice is outlined in the e-Invoice Guideline. Here are some details that would assist the supplier in issuing the consolidated e-Invoice:

  • Buyer’s Name: The supplier should input “General Public” in the e-Invoice.
  • Buyer’s TIN: The supplier should input “EI00000000010” in the e-Invoice.
  • Buyer’s Registration/Identification Number/ Passport Number: The supplier should input “NA”.
  • Buyer’s Address: The supplier should input “NA”.
  • Buyer’s Contact Number: The supplier should input “NA”.
  • Buyer’s e-mail: The supplier should input “NA”.
  • Buyer’s SST Registration Number: The supplier should input “NA”.
  • Description of Product/ Services: This field should include details of products or services being billed for as a result of commercial transactions with buyers. There are several ways businesses can consolidate this information:
    • Summary of each statement/bill is presented as separate line items.
    • Summary of all the statements/bills is presented as a single line item.
    • Each branch or location will submit a consolidated e-Invoice, adopting either of the above methods for the statements/bills issued by the said branch or location.
    • Summary of all the statements/bills issued by each branch or location is presented as separate line items.
    • Regardless of the method adopted by businesses, the statement/bill reference number for each transaction is required to be included under this field in the consolidated e-Invoice.
  • Quantity: This field should include the number of units of a particular product or service in a commercial transaction. The supplier should input “1” for each line item included in the consolidated e-Invoice, regardless of the total number of receipts/bills/invoices being consolidated in one single line item.

Exceptions in Various Industries

In the world of business, the consolidated e-Invoice has become a crucial tool for streamlining transactions. However, it’s important to note that not all activities or transactions allow the use of a consolidated e-Invoice. Here are some exceptions in various industries:

1. Automotive Industry

In the automotive industry, the sale of any motor vehicle is not allowed to use a consolidated e-Invoice. It’s worth noting that a motor vehicle refers to a vehicle of any description, propelled by means of a mechanism contained within itself and constructed or adapted to be capable of being used on roads. This definition also includes a trailer.

2. Aviation Industry

The aviation industry also has restrictions on the use of consolidated e-Invoices. Specifically, the sale of flight tickets and private charters are not permitted to use this invoicing method.

3. Luxury Goods and Jewellery

The luxury goods and jewellery industry also has certain restrictions on the use of consolidated e-Invoices. However, the specific details regarding these restrictions will be released in due course.

4. Construction Industry

In the construction industry, a construction contractor undertaking a construction contract, as defined in the Income Tax (Construction Contracts) Regulations 2007, is not allowed to use a consolidated e-Invoice.

5. Wholesalers and Retailers of Construction Materials

In the wholesale and retail industry of construction materials, the sale of construction materials, regardless of the volume sold, is not allowed to use a consolidated e-Invoice. Note that construction material is defined as any type, size, and nature of material, initial, temporary, intermediate, or finished whether manufactured locally or imported used for the purposes of the construction industry under the Lembaga Pembangunan Industri Pembinaan Malaysia Act 1994.

6. Licensed Betting and Gaming

In the licensed betting and gaming industry, pay-outs to winners for all betting and gaming activities are not allowed to use a consolidated e-Invoice. However, pay-outs to winners in relation to betting and gaming (i) in a casino and (ii) from gaming machines are exempted from e-Invoice until further notice.

7. Payment to Agents/Dealers/Distributors

Payments made to agents, dealers, or distributors are not allowed to use a consolidated e-Invoice. Pursuant to Section 83A(4) of the Income Tax Act 1967, “agent, dealer, or distributor” refers to any person who is authorized by a company to act as its agent, dealer, or distributor, and who receives payment (whether in monetary form or otherwise) from the company arising from sales, transactions, or schemes carried out by him as an agent, dealer, or distributor.

Example of Consolidated E-Invoice

Conclusion

In conclusion, the issuance of consolidated e-Invoices is a streamlined process that ensures compliance with IRBM’s validation requirements while providing a convenient solution for suppliers dealing with buyers who do not require e-Invoices. This process not only simplifies the invoicing process but also ensures transparency and accuracy in financial transactions.

Disclaimer: The information provided on this platform is for general informational purposes only. It does not constitute professional advice and should not be relied upon for making decisions. Wanconnect Consulting Group is not responsible for any errors or omissions in the content or for any actions taken based on the information provided. We recommend seeking professional advice for specific situations. Wanconnect Consulting Group reserves the right to modify, update, or remove any content without notice.

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