Six-Month Long Grace Period for Malaysian E-Invoicing Announced
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During a press conference on Friday, July 26th, Malaysia’s Inland Revenue Board (LHDN) chief executive, Datuk Dr Abu Tariq Jamaluddin, announced a grace period for the upcoming e-invoicing mandate.
This relief measure is scheduled to be implemented for six months starting from the mandatory e-invoicing implementation date on August 1st this year. During that time, all businesses across all industries will be allowed to fulfill their e-invoicing obligation by filing a single summary invoice at the end of each month.
Refraining from prosecuting cases of noncompliance “…will provide businesses with additional time to implement the necessary systems and processes for e-invoicing compliance.”, said the chief executive.
Underscoring the grace period’s main element, Dr Abu Tariq Jamaluddin emphasized that businesses will not be fined under Section 120 of the Income Tax Act 1967 for not complying with the e-invoicing requirement, provided they still issue the summary invoices.
However, this is not the only remedy offered to businesses seeking compliance with the new regulations. Taxpayers who successfully implement e-Invoicing in a timely manner will be provided with a reduction in the capital allowance period from three to two years. This allowance, in turn, will be allowed to be used for ICT and software purchases throughout Assessment Years 2024 and 2025.
Even with this most recent penalty deferment announced, the introduction of a broad-scoped e-invoicing environment is said to be progressing according to schedule. All the previous deadlines remain in place, and businesses should use this extra time to ensure smooth e-invoicing implementation within the planned dates. Click here to read the official LHDN release regarding the grace period.
There’s more you should know about e-invoicing in Malaysia – learn more about the new and upcoming regulations.