KUALA LUMPUR: Companies and businesses need not fear hefty fines or jail terms if there is a “good reason” for non-compliance with the mandatory e-invoicing starting this Aug 1, said Datuk Dr Abu Tariq Jamaluddin.
The assurance from the Inland Revenue Board (LHDN) chief executive officer comes amid concerns that those failing to meet e-invoicing requirements could face fines ranging from RM200 to RM20,000, or up to six months in jail, or both, for each instance of non-compliance.
“We will consider their problems, which they may be facing, and if they have issues, we encourage them to meet our team.
“Under the law, the provision (for penalty) is there, but we will consider it on a case-to-case basis and how to assist them with their problems,” he told reporters after a 90-minute dialogue session at the Associated Chinese Chambers of Commerce and Industry of Malaysia’s (ACCCIM) Power Chat e-invoicing yesterday.
He was asked to comment on the rollout of the first phase of LHDN’s e-invoicing, which begins on Aug 1 and involves companies or businesses with an annual turnover of RM100mil and above.
Under the rollout plan, businesses with revenue between RM25mil and RM100mil must implement e-invoicing by Jan 1 next year.
By July 1 next year, all businesses, excluding micro, small and medium enterprises (MSMEs) earning less than RM150,000 annually, are required to file e-invoices.
During the dialogue session, Abu Tariq stated that mistakes may occur on the part of taxpayers during the rollout of the first phase of e-invoicing, but these errors would not necessarily result in penalties.
“There will always be a reasonable excuse on the part of the taxpayer.
“If there is a good reason, we will exercise our discretion whether or not to impose a penalty on a case-to-case basis,” he said.
When asked if the e-invoicing rollout would be delayed following calls by some parties, Abu Tariq noted that the new system was announced as early as 2022, including during the Budget 2024 discussions.
A call to defer the full implementation of e-invoicing to Jan 1, 2027, instead of July 1 next year, was made recently.
ALSO READ: Over 5,000 applications for MyInvois access ahead of Aug 1 rollout, says LHDN
Abu Tariq added that several concessions have been made to ease the transition process, such as allowing companies and businesses to submit consolidated monthly e-invoicing instead of for every sale or service provided.
However, he said businesses must keep a record of every transaction in their system and be able to produce them upon demand.
He noted that e-invoicing will operate as a “real-time validation system” for LHDN to capture information about the seller and buyer.
“Once validated, this will be used as the official invoice. It happens in real time in about two seconds upon submission,” he added.
Another concession, he said, was announced on July 2 by Finance Minister II Datuk Seri Amir Hamzah Azizan that MSMEs earning less than RM150,000 annually were not required to adopt e-invoicing.
“They will be fully exempted from e-invoicing for the time being and need not submit e-invoices or consolidated e-invoices.
ALSO READ: Micro SMEs earning below RM150,000 annually exempted from e-invoicing, says Amir Hamzah
“We will update our e-invoicing guidelines to reflect the latest policy changes,” he said.
Earlier in his opening address, Abu Tariq said that over 5,000 companies and businesses have applied for access to LHDN’s MyInvois portal ahead of the rollout on Aug 1.
IRB also recorded more than 20.5 million requests for access to the system between April 10 and June 30 to test its free e-invoicing accounting software programme.
Abu Tariq said over 100 pioneer companies have since been granted access to the MyInvois API Production Environment ahead of the Aug 1 deadline.
