E-Filing + E-Invoicing Management Workshop.

Choosing to voluntarily participate in the e-

invoicing

implementation at an earlier date, regardless of your annual billing or annual income now, what are the benefits? We understand that the transition to e-

invoicing

will definitely involve a significant change not only in technical processes but also in organizational culture and personnel

management

as well as strategies when it comes to transformation, the question here is Why? should we implement the invoice correctly? This is what you will get first, automation of data, entry into business transactions, it will reduce manual efforts and human errors, the second benefit you will get, definitely, tax return

filing

will become easier when the system is integrate perfectly.

For efficient and accurate tax reporting, meaning your Erp system connects with our my invo system and advances the data, we are planning for the data to be extracted and pre-populated into the income tax return form of taxpayers when the system is mature enough to The third benefit will be for large companies. Invoices can save costs and money in operations. People say that every minute, the right people say that every minute counts as money and the last one for micro, small and medium enterprises or MSM. You can align your financial reports. and processes with industry standard and mitigate potential disruptions as well, so these four final benefits help improve the operation of your business as a whole, okay, so when it comes to the benefit to the SE payer, the question arises. question as to why the government start initiating this initiative and what are the benefits to the government, so well that the government could address the fiscal gap issues.

Tax gap issues mean the difference between the actual and potential tax to be collected, and then the second benefit, the government will be able to ensure tax transparency at all levels and increase productivity through digitalization and automation and then meet the design or compliance with the design is one of the main things that we look for in IRB, where compliance by the design or the design meets the system. is our top priority in the future, it means that we incorporate rules and standards in the design of the systems to ensure that each or every taxpayer meets the legal requirements and follows the tax policy from your St.

OK platform, where you can comply and at the end comply in full, okay? We've been talking about e-invoicing since the beginning, what are they? Most of you will wonder what electronic invoice is. There are four types of e-invoice transactions in the business environment to determine income and expenses, number one is invoice number two. it's credit Noe debit note and refine note basically when it comes to electronic invoice and invoice it's like a digital version of all these four well digital version of all these four a transaction between a seller and a buyer and invoice contains uh the same thing uh information essential as a traditional document than the current business practice of uh, such as seller details, buyer item details and description, quantity, price, total amount etc., in other words, invoice is a digital replacement of the documents in paper or electronic that currently used in daily business operation, in fact, the invoice is a file that is created in the format specified by lhdm, which means that EXL XML or Json formats are only ok, only two formats, which we are using XML or Json format, and can be processed automatically. uh relevant system uh just to note that format like uh PDF is fine, format like PDF jpeg doc doc and others will not be recognized as e-invoice.

The only electronic invoice format is to use XML or Json format, the only important thing is that validation. The process is done by lhdm in real time or near real time and the data will be protected from data tempering by R. Well, now invoice basically works for different types of business transactions like business to business sales. to other businesses, the second is custom consumer business selling or b2c and the third even deals with a government transaction, so if you are doing business in Malaysia, the invoice is something you will need to use because it applies to all taxpayers who commit. business activities in Malaysia for B 2G for H where sorry ok, for B2 G and B2B the process flow will be the same and then for B2 C and certain B2B there are two possible scenarios: the first scenario will be when a electronic invoice to a buyer or a consumer, upon request, they do not issue an invoice;

In this case, the seller needs to obtain the buyer's information or the buyer's details for issuing the invoice before the seller can issue an invoice. The second scenario in which the buyer does not require an invoice. The buyer doubles down and then says no, I don't want eVoice, so what will happen next is that the seller will have to issue a normal receipt to the buyer, same as current business practice. It is not necessary to send this receipt to LHD and M for validation as it is not considered an electronic invoice, the seller will be able to add transactions on a monthly basis and send a consolidated electronic invoice to lhdm within seven calendar days after the end of the month.

Okay, that is very clear, then the question arises that when should we issue a correct invoice, why do we need an invoice? why do we need to issue an invoice? The first will be an income test that is very clear under income tax X or other tax law. Okay, proof of income as a seller, you need to issue an electronic invoice. invoice each time a sale or other transaction occurs to recognize the seller's own income, secondly, it is proof of expenses, okay, this covers purchases made or other expenses made by yourself, as is evident, expenses , okay, there are two main reasons why we need an invoice as proof of income and proof of expenses, okay, this is the revised e-invoice implementation schedule, the pilot phase of e-invoice implementation will start in May 2024, next month, sorry, next month plays a crucial role in testing and Validating the visibility functionality and preparing my small-scale system before it goes live.

Broader, so this pilot project was basically started to test the e-invoicing system with voluntary taxpayers or companies participating in. This program allows real data testing on the system as well as in a control environment, to identify any issues, feedback from GA and make necessary adjustments before full implementation, below, a common question we received during the session of participation with the The pilot company is about the system. Preparation as the implementation date is just around the corner, so some pilot companies have already started developing their own internal system to integrate with our billing system for these pilot companies to assign dedicated billing officers. lhdm my team uh uh e billing committee to assist them from time to time by providing guidance on process integration and testing through uh touch point uh meetings in return LM requires uh feedback from Pilot companies to ensure system readiness before a wider rollout in the year in July 2025 in Phase One August 1, 2024 phase one is scheduled for August 2024 and is mandatory for taxpayers with annual turnover or income exceeding RM100 million per year, followed by phase two, phase two, in January 20125 for taxpayers with an annual turnover or income between RM25,000 and 100 million uh and then phase three, uh, the rest for all other taxpayers will join in July 20225.

Once again, we encourage businesses to voluntarily participate in implementing the bill at an earlier date, regardless of their annual revenue or annual billing. Okay, the following annual turnover, annual turnover or revenue for the implementation of the electronic invoice will be determined based on the annual turnover or revenue indicated in the statement of comprehensive income in the outdated financial statement for the financial year 2022; However, for taxpayers who are not required to submit an audited financial statement, the mandatory criteria are determined based on the annual income reported in the tax return of assessment year 2022 also in case of a change of accounting period in case of change of accounting period for the financial year 2022, the taxpayers' turnover or income will be calculated in a period of 12 months for the purpose of determining the eVoice implementation date Again, just a notice for the purpose of determining that the annual turnover or income will be based on the audited financial statement or tax return for the year 2022, once we have the implementation schedule of your e-invoice, please establish any changes in the annual business volume or income .

Subsequent years will not affect your obligation to implement an invoice according to the established schedule. Okay, next, this slide shows the transmission mechanism. The billing process involves creating a file in a specific format and verifying it in real time or near real time. validation through continuous transaction control settlement model, CTC models, so the main consideration here when choosing this model is to provide flexibility to taxpayers in selecting the e-invoice transmission mechanism for ldnm. This CTC model allows the taxpayer to independently decide whether to send e-invoices directly from their Erp system to LM or involve an external service provider uh or middleware to assist taxpayers uh lhdm we have provided two e-invoice sending mechanisms for verification purposes it is necessary for taxpayers to carry out an internal assessment within yourself to determine the appropriate mechanism to implement this electronic invoice according to the needs of your business number one, the first is through the My Bill uh portal, developed and hosted by LH DNM to send invoices for verification, verification and application purposes.

This portal is accessible to taxpayers and provides the necessary functions to issue, send, review, cancel or reject invoices, in addition, users can view and search invoice transactions that have been received by LHM. The second mechanism is known as API. The mechanism's application programming interface involves a set. of program codes that allow taxpayers to send electronic invoices through their Erp system to lhdm, so this method definitely requires an initial investment in technology and adaptation to the existing system, then the API connection can be established directly to ldm or to through a third party. service provider, it's okay, you can take some time to choose if you want to use my Evo portal directly or if you want to integrate it with the lhn system through your Erp system.

So please note that lhdn does not require service providers or For technology providers to be certified, it is essential that they all meet and approve the test environment standards, as we do not provide certification. You or your company are responsible for evaluating and choosing middleware vendors based on their reputation, so we will provide the environment for third parties to build, test your solution and ensure compliance with our requirements, okay, again, okay, To issue an electronic voice for verification or validation, you will need to include 55 data fields and send them to LHDM for validation at this time, generally the field consists of 37 mandatory UH fields and 18 optional requirements, so these fields are grouped in eight categories, uh, we can see from here the address of uh, business details, contact number, invoice details, parts, part details, payment information, products and services, the item in light yellow, here is optional. field, the rest is required, okay, the rest is required now, also, if your company is involved in specific activities, such as importing or exporting goods or services, you will need to submit an annex with uh 12 additional fields to lhdm as part of the E. invoice process okay and again the one in light yellow is optional Fields Now we move to the second part which is the my invoice system and its mechanism so this slide provides an overview of the invoice workflow Malia electronics, what are you going to do? uh what will the process cover from the point of sale? uh uh, from the moment a sale is made or a transaction is made, the supplier issues an invoice through my invoice portal or API, the flow ofWork continues including storing validated data.

The electronic invoice is in the LHD database, so this functionality allows the taxpayer to evaluate and review their respective historical invoices, providing a very complete perspective of the transactions over time, as I mentioned above. LDNM has introduced two electronic invoice submission mechanisms for verification purposes. The first is through the My Bill portal itself, a portal hosted and developed by LDNM for free, which means that access is free. The second is the method that involves an API mechanism that allows you to transmit invoices directly from your Erp system to LHDM. These two options offer flexibility for businesses to accommodate various preferences and technical capabilities to submit their invoice for validation.

This slide provides detailed information for those who prefer to send EV voices using the API mechanism. We have the flexibility to stream directly from your ERP. system or through your service provider, whether through PayPal hotspots or non-PayPal hotspot service providers, this workflow will guide you through the options available to ensure the process sending electronic invoices is simple and efficient. That MDC is the Malaysian Payments Authority, so they play a role in accrediting Malaysian PayPal service providers and PayPal ready solution providers. If you are looking to use p as a service provider, you can check out MDC because they are now our Payment Authority for Maure.

It will explain the details and briefly describe each step to provide a comprehensive understanding of the process. If you choose option one, sorry, in the My Invoice portal, you have the option to create individual electronic invoices by completing all required fields and submitting them. to lhdm for validation. Alternatively, you can generate batches of electronic invoices by uploading a file to my invoice portal containing the necessary invoice information required by lhdm. If you select sorry, let me come back if you are using option b. The invoice API mechanism is created following a specific structure in XML or Json format, then you can send it to ldnm for validation step number two, validation for my invoice portal, if you are using option one after lhdn validates the invoice . lhdn will send you a validated electronic invoice containing the unique identifier number U unique identifier number validation date and time and a valid validation link if you, if the invoice is returned unvalidated, you will see an error message, simply correct the error and resubmit it for validation once the issue is fixed when you are using option b uh API mechanism or API integration, you will receive a response including the unique identifier number, validation date and time and a validation link, same as when you use my invoice portal, so this response is delivered via API if errors are detected during validation. and API errors will be displayed and API response will be provided after successful validation, finally now the question here is why there is ldnm unique identifier number during validation process.

Well, the uin or the unique identifier number will be used, it allows it. lhdn to easily track and trace invoices throughout their life cycle, verify their authenticity and minimize instances of invoice tampering in short, to avoid this, we now move on to step three: invoice notification to my portal user Invoice Once the electronic invoice has been validated, LHDM will notify both the seller and the buyer through the my invoice portal. An email will be sent for this notification that includes details about invoice settlement and the buyer's rejection request. If you are using API integration, there will be an API that allows uh taxpayer to receive notifications from lhdm directly or through a technology provider, then the bill uh the my bill system incorporates a notification API that automatically triggers notification to both the provider and to the buyer upon validation of the invoice, so both the seller and the buyer will definitely receive a notification once ldnm has validated the invoice.

Now, step number four, share the electronic invoice after the validation process. The seller or buyer must share the validated electronic invoice with the buyer. The visual representation of the electronic invoice that you created in my. The invoice portal must have a QR code, so the QR code can be used to verify the existence and status of the invoice through my invoice portal. Now move on to after ldm validates the electronic invoice. The seller or buyer can cancel or reject the electronic invoice within a specified period by the buyer if there are errors in the electronic invoice, the buyer can request rejection within 72 hours from the time of validation, the rejection request must include the reason or justification and a notification will be sent later to the supplier in a similar manner If the supplier identifies errors or errors in the invoice, they can cancel that invoice within 72 hours from the time of validation.

The cancellation request must specify the justification and a notification will be sent to the buyer also if the invoice is not rejected or canceled within the deadline. The specified deadline, which is within 72 hours, will be automatically accepted and will remain valid. Any subsequent adjustment must be made by issuing a new invoice, such as Noe credit, Noe debit or Noe refund, invoice soring uh by lhdm, all invoice validated. It will be stored in the uh lhdm database. Taxpayers are advised to maintain sufficient records and documentation relating to each transaction under the current existing section 82 of the Income Tax Act of 1967.

Taxpayers are required to maintain sufficient records relating to their business or operating income for at least least seven years from the end of the evaluation year. We at the IRB believe that the duration of this record keeping will be reviewed. Inshallah will be shortened in the future when e-invoices are fully implemented and the system is mature enough. Step number nine about informing uh the question here is it possible for suppliers or the buyer to request and retrieve electronic invoices yes the answer is yes, both the seller and the buyer can request and retrieve invoices through my invoice portal or the API integration, My Bill Portal shows uh definitely key uh Invoice details including invoice date amount status and other relevant information sent to us so you can track it from our My Bill portal, but the format it will be in XML or Json, either one by one or in the package.

The second format is in metadata uh CSV report grid and PDF file Now we move to the third part, which is the specific guideline of the e-invoice. I hope you are still with me because this topic is more in-depth compared to the previous slide, we will explore the specific guidelines published by lhdm. On February 9, 2024 of this year, this specific guidance is designed to provide guidance on issuing invoices in 13 key focus areas, as shown on the slide. We hope that the information we provide helps you better understand the specific electronic invoice. treatments and ultimately allows you to implement the invoice successfully, so this guide is definitely not exhaustive and we will update this guide from time to time after implementing the e-invoice.

The seller or supplier must issue the electronic invoice for all transactions, however, some. Buyers, such as consumers and certain businesses, may not need an electronic voice as proof of expenses. The buyer wants to buy something and manages to get the item and then the seller asks the buyer if he wants the invoice or not and then the buyer says. Uh, yeah, I want the invoice, so what's this? What is the flow that will be the invoice? This overview illustrates the process of issuing invoices to buyers. For the buyer's transaction there are two scenarios. On this slide, scenario number one.

Scenario number one. when the buyer requests an e-invoice, then the seller provides necessary facilities to issue the e-invoice as per the transaction, the SP the seller fills the required information, following the guidelines issued by lhdn, issues the invoice and sends it to lhdn for approval. validation upon receiving the validated electronic invoice, the supplier sends the validated electronic invoice to the buyer. Scenario number two, if the buyer does not require an electronic invoice, the supplier can issue a consolidated electronic invoice on a monthly basis and send it to lhdn for validation within seven calendar days. At the end of the month, however, there are activities or transactions for which a consolidated e-invoice would not be permitted, therefore an e-invoice must be issued for each transaction.

I will explain in more detail on the next slide if you have multiple Msic codes for companies, it definitely has Music codes. You must include the Music code that is relevant to the transactions. Any invoice issued for a transaction must be related to that particular business activity, in short, one music code per invoice, this flow demonstrates that when the supplier asks the buyer if he wants an invoice and the buyer answers yes, I want an invoice for Simplify the invoice issuance process for the seller. Individual buyers in Malaysia may choose to provide their tax identification number or my court number, or both, to the supplier if they provide only one.

The seller can use a general uh number on the e-invoice to replace one of them for non-Malaysian individual buyers. they can choose to provide their tax id number or both uh tin, or passport number, in case they don't have a tin then the seller can use the general tin to issue an e-invoice so that the general team can get that information. In our specific guide we now continue with the same diagram, but the buyer does not require an invoice. Now we are looking for the buyer to require invoice, so this slide will show that the buyer does not require an invoice when the buyer does not require an electronic invoice, the seller or supplier will issue a normal receipt to the buyer, same as current business practice;

However, it will not be necessary to send said receipt to LHDM for the validation process, since that document is not an electronic voice, so the seller does. You will be allowed to add transactions with buyers that do not require an invoice on a monthly basis and send a consolidated electronic invoice to lhm within seven calendar days of the end of the month, in any case, if the buyer suddenly changes his mind, buyer, then, suddenly, if Suddenly, the buyer changes his mind and requires an invoice after receiving a receipt from the seller. You can request one within a month of the transaction, so this allows the seller to set a time limit for adding. receipt on consolidated invoice soers are advised to request the e-invoice as soon as possible after receiving the receipt to ensure that the seller processes the request in a timely manner for the consolidated e-invoice lhdm uh allow sellers to choose one of the one o a combination of presenting the summary of each receipt as separate line items on the consolidated uh e invoice o presenting the list of uh receipts with continuous receipt numbers as individual line items o submitting a consolidated uh e invoice for each branch or location that can consolidate The invoice is based on the series of receipt numbers.

If there is a break in the sequence of receipt numbers, then the next series must begin on the next line. You must still comply with the maximum size limit of 5 megabytes if you exceed this limit. You will have to split it into several e-invoice documents. You cannot include the same invoice document in a single shipment. Instead, send multiple consolidated invoices. You can split the invoice into a smaller segment to meet the size requirement. Just to note that Please note that consolidation does not apply to Safe Bill invoice here, so this industry or activities where one invoice is required for all transactions, so no consolidated invoice is allowed for this industry, in other words, taxpayers or sellers in This category will not need to obtain buyer details for each issuing invoice and will not be permitted to issue a consolidated invoice.

Currently, the industry and activities that require an invoice for each transaction are automotive aviation luxury goods and jewelry. however, luxury goods and jewelry, we are still looking to review this part and are leaving it on hold. The fourth is construction. Five wholesalers and retailers of construction materials. Betting licensesand game payments to agents, dealers and distributors. We understand that the potential. The challenges in issuing e-invoices to individual buyers, whether Malaysian or non-Malaysian, for these seven activities are quite challenging in this regard. We offer a concession to individual buyers that allows them to use their p number, uh, text ID number, uh, my court number or passport number as mentioned in the previous slide as a concession, okay, we believe that certain companies , industries or sectors currently issue statements or invoices to record a multiple transaction over a given period of time, such as um monthly B monthly quarterly uh or annually instead of issuing individual invoices uh for each transaction again, to name a few, there are some electronic payments digital, such as financial services, including banks and financial institutions, healthcare insurance, telecommunications intermediation and others, so leasing is not limited to facilitating the adoption of online electronic invoices with a company, a current business practice, lhdm allows sellers to issue electronic voices for validation purposes using their current methods to issue an uh statement or Bill Once the lhdm validates the electronic invoice, the seller can use uh the statement or Bill as a visual representation that includes the QR Code For the buyer, the frequency of electronic invoices depends on how often the seller sends invoices or statements.

If the buyer does not need an invoice, the seller can issue a standard statement later, the seller must provide a Consolidated Invoice for validation to lsdm now we are moving to disbursement and refund this uh bment refers to the expenses paid by the buyer to a third party on behalf of the buyer so these expenses cost to cover the cost related to the services provided or the good sold by the seller, where the reimbursement is expenses incurred by the seller in the cost of the provision of services or the sale of the good to the buyer, so the buyer then reimburses these expenses, which may include airfare, travel, accommodation, telephone and any ongoing charges currently required by the sellers. include reimbursement and disbursement information in the electronic invoices to the buyer for scenario one for the supplier of the first scenario One issues an electronic invoice to the buyer for the sale of goods or services provided that payment is made by supplier two a third party to supplier one based on the agreement between the buyer and Supplier Two, then Supplier One issues an electronic invoice to the Buyer for the services or Goods, while Supplier Two separately issues an invoice to the Buyer for specific items, such as service charges, the electronic invoice issued by supplier one does not need to be included in the electronic invoice issued by supplier two to the buyer to verify payment.

Supplier two only needs to provide proof of payment made to supplier one. Let's go back to supplier two. Supplier One issues an electronic invoice to Supplier Two as a third party for a sale of goods and services provided to the Buyer Supply Two then pays Supply One as agreed with the Buyer Subsequently Supply Two issues an invoice to the Buyer including the amount paid on behalf of the buyer and then the invoice uh the invoice for Supply Two contains information about the sale of goods or services and includes two items, charge and refund or disbursement, okay, now the employee under an employment contract or service contract can receive benefits from your employer so that this benefit may be in cash or in kind and which will be provided by the employer or third parties as a result of employment law, such as reliability bills, club or gym membership, professional subscription or allowances, currently the Employees must submit their expense claims to their employers.

If employees are allowed to claim these expenses, they must provide evidence as proof of authenticity with supporting documents such as invoices, payment receipts, bill statement or sleep payment and ET, so these claim expenses become in employee expenses and are reported. For tax purposes, when implementing invoices, employees should request that electronic invoices be issued to their employer as proof of expenses. We understand the potential challenges in issuing e-invoices under the employee's name as a buyer, therefore we offer allowance for this scenario. Companies can use the e-invoice issued in the name of the employees or the supplier's existing supporting documents to support the particular transaction as proof of expansion for tax purposes.

The second concession is whether benefit payments are made to foreign suppliers. either the employer or the employee needs to issue a secure invoice uh ldnm uh will definitely accept receipts, invoices or invoices from abroad Supply as proof of expenses uh proof of expenses as well, so this concession will apply only if the prerequisites or benefits are clearly stated in the employee policy in your policy as an employer, so now the treatment, when a sale or transaction is completed, the supplier issues an invoice to recognize your income as proof of income and documents the purchases made by the buyer as proof of expenses.

However, there are situations where a third party, other than the supplier, can issue a secure electronic invoice. It is allowed for these eight transactions listed here on the slide. If a buyer needs to issue a secure e-invoice, they will act as a supplier who creates and sends the e-invoice to lhdm for validation, once validated the buyer can use that invoice as proof of expenses for tax purposes; in this case, the other party does not need to issue an e-invoice for that transaction, only one party Okay, we understand that the role of agents and distributors or distributors is common in the business supply chain, so it has really been going on for years and these third party brokers, agents, distributors and distributors definitely earn commissions from selling products or supplying uh. services to consumers when a buyer uh when a buyer purchases goods or services from a seller through a dealer or distributor agent, the seller must issue an electronic invoice to record the transaction if the buyer does not require an electronic invoice, the seller provides a normal receipt to the buyer is fine, then the seller must issue a consolidated electronic invoice combining all receipts from the previous month as proof of income within seven days of the end of the month, then the agent, dealer or distributor has entitled to receive a payment or other incentive, whether monetary or otherwise, from the seller, such as commission, the seller will issue a secure invoice, whereby the seller will issue a bill e to the distributor agent and the distributor, for so the seller will issue them an invoice s Bill e, uh agent, uh, dealer dealer, recording the amount of commission earned. by them as proof of income and proof of expenses for the seller, so the process of issuing the e-invoice and secure invoice follows the detail mentioned in my previous slide, so now the cross-border transactions definitely include the activities of import and export, import where Goods sold or services provided by a foreign seller as a supplier to a Malaysian buyer as a buyer and export goods sold or services provided by a Malaysian seller as a supplier to a foreign buyer for import transactions currently when a foreign seller makes a transaction with the Malaysian buyer imports from abroad, so the foreign seller will issue an invoice or receipt to record the sales of the good or the provision of services, so that this document meets the electronic invoicing requirement of the country itself foreign, as the foreign seller is not required to implement the Malaysian e-invoice system, so the Malaysian buyer is required to issue a secure e-invoice to document the expenditure for tax purposes, so that this secure e-invoice serves as proof of expenses for the Malaysian buyer and, you know, pass it on to the foreign seller.

The formulation buyer can find the details of the foreign seller on the invoice receipt or on the invoice provided by the foreign seller or can request the necessary details directly from them if certain required details are not available, so you can simply not put them. available and in the S Bill e invoice, furthermore, Malaysian buyer should include the service tax amount in the secure invoice Bill e, so when should the secure invoice Bill e be issued? Well, uh, for the import of goods, the buyer. The Malaysian buyer must issue a secure electronic invoice after obtaining the customs declaration, customs clearance, sorry, however, for the implementation of the import of services uh.

The secure e-invoice must be issued after payment by the Malaysian uh buyer or upon receipt of the uh invoice from the overseas supplier, whichever comes first. However, for export transactions, Malaysian sellers must issue uh NE voice to record the proceeds from foreign purchases, so sellers must complete all required uh fields. And if certain details, uh, if certain details are not available, then you need to enter uh input na not available in the invoice E, after validation, lhdm notifies the mission seller that the validated invoice serves as proof of income so that then sellers share a copy of the validated invoice with foreign purchases to keep records if there are any errors, sellers can make adjustments Issue credit notes, debit notes or refund notes, E invoices, so now we are moving towards the distribution of profits.

Dividend coupons or warrants are commonly used by companies when distributing profits to their stakeholders to serve as proof of dividend received by shareholders in the form of dividend where e-invoicing is implemented in Malaysia, certain taxpayers including those who do not are eligible for tax deduction under Section 108 of the Income Tax Act, 19667 and those listed in uh bua Mia uh, then these two are Tech uh are You are exempt from issuing an e-invoice due to the consequences of the dividend distribution, consequently, the shareholder does not need to provide an electronic voice as proof of income, so this exemption will be reviewed and updated periodically by us, essentially, taxpayers who benefit from this exemption can maintain their current uh. profit distribution procedures, however, the taxpayer who is not covered by this exemption must issue a secure invoice to record the expense.

Similarly, this social security invoice will serve as proof of income for the recipient of the profit distribution , for example, the provider of any foreign profits or dividends received in Malia. The recipient must issue an invoice to document. as proof of income for tax purposes, we are now moving to the currency exchange rate, uh, uh, this currency exchange rate in the data field of the electronic invoice, uh, can also be used for foreign currency transactions , which are different currencies than the entrance door, if necessary. The currency exchange rate must be determined by the provider itself. This supplier or his company must comply with any legal or tax requirements regarding the exchange rate imposed by the relevant authorities, such as the Royal Am customs department or lhdn and ET, if applicable.

There are no legal or tax requirements regarding currency exchange rates. The supplier can use the current exchange rate according to its own internal policy, so that the supplier can choose an option to issue invoices. Any of the suppliers can send the electronic invoice in the corresponding foreign currency. and the applicable currency exchange rate without the RM equivalent or the supplier may submit the E-invoice in the relevant foreign currency and the applicable RM equivalent without the currency access fee or the supplier may submit the E-invoice in the corresponding foreign currency RM equivalent along with the currency exchange rate, you can choose one of these three.

Okay, now we're moving into the very complex flow where it's an e-commerce transaction. E-commerce transaction refers to the purchase or sale of goods or services. online, while goods or services ordered online, payment and delivery do not necessarily occur online, so this transaction involves different parties, such as businesses, households, individuals, government and other organizations, whether public or private, as far as the transaction flow is concerned here on the slide uh e-commerce in e-commerce transactions include different parties like buyer seller service providersmerchants and the e-commerce platform itself each party has a specific role in the process and e-invoicing uh accurately documents this interaction okay please allow me Share one of these three issuance processes for issuing invoices from the platform e-commerce from supplier to buyer.

Currently, the ERS e-commerce platform provider would issue an invoice or receipt to the buyer to record the entire transaction in the email. -Trade platform with the implementation of electronic invoice. The e-commerce platform provides suppliers. You must issue an electronic invoice to the buyer upon request or a receipt if the buyer does not require an invoice if the buyer requests one. Sorry if the buyer does not request an invoice, so e-commerce platform providers can combine all transactions with such purchases on a monthly basis and provide a consolidated invoice to LM within seven calendar days from the end of the month for than then the Merchant. o service providers are not required to provide an electronic invoice or receipt to buyers for the goods sold or the Services are functioning properly, so it was the issuance of invoices from the e-commerce platform provider to the buyer so that he can read the remaining two. on your own so now when we talk about e-invoicing don't worry one of the top priorities emphasized by lhdm is to ensure the security of the data and the system as a whole to achieve this goal at hdnm we definitely make sure to that My invo system complies with uh and specific certification according to various requirements and practices to safeguard the integrity of confidentiality and availability of data and transactions within the system itself, so this certification guarantees that the system meets the rigorous information security and business continuity requirements. give users confidence in its reliability and security measures, okay, now we move to the fourth part which is the software development kits SDK, so the SDK is part of the ldnm my billing system which consists of tool and resource libraries, so the purpose of the SDK is for companies to integrate their current system with the my invo system through the application programming interface API, so the SDK was released on February 9, 2024, essentially this SDK guides the contributor on how to integrate APIs with ldnm.

Well, this slide shows For the different types of API integration with the Erp system, the SDK provides various functionalities and APIs that allow companies to establish a connection between their software applications and my Evo system, so this integration makes it easy to Hassle-free data sharing and communication, specifically for e-invoicing purposes, just by using the SDK, businesses can streamline their e-invoicing process, ensuring efficient and effective

management

of transactions within the My Bill system. In fact, it also provides development guidelines that detail best practices according to standards and technical characteristics. specification for integration with the system um my invoice uh ensuring compatibility and efficiency in system integration uh okay alhamdulillah now we move on to the final part about an invoice support channel uh so these are announced tax incentives in budget 2024 uh last year to promote digitization and implementation of invoices, let's take a look at number one, where is the accelerated capital allocation?

Capital allocation to support competitiveness, the government proposes to shorten the application period for capital allocation for equipment purchases, installation of computer software packages Consulting fees, licenses and incidental fees related to software development from four to 3 years from assessment year 2024, the second incentive will be the tax deduction for ESG expenses. What is ESG? ESG is environmental, social and governance, so this incentive is basically micro, small and medium-sized businesses. MSMEs can claim a tax deduction for expenses related to ESG preservation up to 50,000 rings per year, so this electronic invoicing is part of the ESG initiative because it involves digitalization, so this incentive applies from the year 2024 to 2027.

Okay, now, ladies and gentlemen, to help all of you adopt electronic invoices. um uh successfully, lhdm has provided four key avenues of support. Firstly, there is the invoice microsite that serves as the main portal for essential updates on the inv invoice system. Here you can access the latest information on implementation schedules, technical specifications and compliance requirements, the LDN issued the invoice, version 2.2 of the general guidelines, on February 9, 2024, replacing version 2.1, by what several key changes have been made to this guide and then bill the specific guide version. 2.0 was updated on the same date, February 9, 2024, so this update offers more guidance on specific areas of electronic invoices so that you can better understand how they work and their related treatments, so that both the invoice guideline electronic and the specific guideline will be subject to periodic review. updates with the latest version scheduled to be released later this month, inshallah Lastly, the Software Development Kit SDK was also released on February 9, 2024, so this SDK is designed to help businesses integrate apis with lhdm providing guidance and support on this. aspect that we have engaged with various industries to discuss and provided industry-specific FAQs so that these FAQs are documented and designed to address the unique challenges, concerns and requirements of different sectors or industries regarding e-invoicing at provide these FAQ specific FAQs.

Support businesses across sectors to understand and navigate the complexities of invoices. Feel free to assess questions specific to this industry through our invoice microsite on the official LHDN portal whenever you need. LHDN is currently in the process of preparing updates for other industries and this will, inshallah, be released as soon as they are ready; However, the industry can also share their operational processes with LDN for our review and feedback, so I believe this approach helps us understand each other better and benefits both businesses and LHD. And in the end, now alhamdulillah, if you have any questions or opinions, we would love to hear from you, please send them to the given email address.

Show on the slide my invoice on Hassel do.my for general enquiries, for general enquiries. SDK related queries simply email SDK my invoice for example. So I hope for a positive response and successful adoption of the bill. Thank you. I will now hand it over to Mr. Sam for the next agenda. Thank you so much. Mr. saz. Wow, very wonderful to share. Really very impressed with its details. explanations and the whole mechanism of electronic invoices because it is something very new for all of us, so any questions you want to ask, you can always go back to the slide that is available at the bottom of your video. a link, click on it and then you can ask questions there so far.

Are there any questions that you guys find from the floor because we didn't see much? Yes, I do. I can see that many questions have been posted. Participant, can I randomly choose one of those? Yes, please, and answer that question accordingly. Yes, thanks. It's okay, it's okay. This question has no number, but I randomly share a question from uh. Anonymous if you are unable to submit the invoice in real time to the IRB. Can we send it? weekly, so the answer is there is no specific time of issue for invoice E other than where the consolidated invoice of foreign income and import of goods or services is applied as close to the real time as refers to the validation of the invoice when sending it to irbm, etc.

The validation of the sending tobm will be done almost in real time, okay, so that's from Anonymous and then I can see from the receipt of the donation to the payment of the operation. Bill needs to be configured. Yes, the party receiving the donation must issue eVoice to the donor. and then the next question from Anonymous also any extension of the e-invoicing implementation date no extension in the DIS schedule as per what I have said on the slide any issues to address uh uh lhdn writing formally with detailed justification so yeah You have If you want to request anything about the invoice, please let us know in return, okay, so the next question maybe only answers five questions now.

I just answered three, so there are two left. So how long does LHD and M take to validate? an electronic invoice, I have already answered this, the validation is almost in real time, so this function is already established or mentioned in the guide as well and then Anonymous also asks if electronic invoicing will be mandatory for everyone how much can we reach Basically, through the software, the taxpayer can select the most suitable mechanism to transmit the invoice to ldnm based on his specific needs or business requirements, so the lhdn only provides two mechanism channels for issuing invoices, namely, the API mechanism and my invoice. portal itself, my invo portal is hosted and developed by lhdm so that all taxpayers can access my invo portal for free with any charges, the only thing is to use their text id, so I think, Mr.

Sam , I've answered some questions from the floor, so I'll give it back to you. Thank you so much. Wow, great. Basically, the invoice is a digital representation of a transaction between a supplier and a buyer. Well, now that we are going digital, it is always good to implement this. The benefit includes reducing manual efforts and human errors, number one, facilitating efficient tax settlement, i.e. number two, optimizing the efficiency of operations, number three and number four, digitizing tax reporting financial. Well, these are the four main benefits when we get into e-invoicing so that we always can.

Learn more on the h.g. website. nny where you can actually see the enrollment, so click on it and you can see all the relevant information and all the frequently asked questions and answers, so because today it's very compact. It is shared by Ms. sash shle, so we may need more additional information. correct information because there is something new for us so feel free to go there check it yourself if you have any questions don't hesitate just contact our ldnm officer they were we are more than happy to help us all so which, um, I think the implementation schedule of Implementation, maybe you can re-emphasize it, okay, August 2024 is actually for an annual revenue turnover of over 100 million, correct or not, Mr.

Shley, yes , and then in January 2025, an annual revenue turnover between 25 million and 100 million, okay, run. and then next year, July 2025, mandatory implementation for all other taxpayers, including all of us here, so we still have time, so feel free to do a little digging ourselves and find out more, any last words. Mr. Shazli, you want to close. your sharing, well thank you for inviting me and Mr. Taking to briefly explain about eiling, as this month is the session for e-

filing

and billing session, just to note that, for the service provider , the sandbo, inshallah, God. willing will be ready at the end of this month of April if you want to integrate with our system uh the sandboard will be ready and will be announced on our micro site so that's all in advance yeah thank you very much happy long vacation. right yeah, happy long vacation, happy Ramadan and um let's go back to the main slide um and we have our main slide ready so we have one last thing to do for all the participants uh Mr.

Kil and Mr. Shipa, can you please set up the slide major? Okay, are there any, or maybe, let me share my opinion. Okay, so can you see this? These are the evaluation forms E. Yes, basically, all participants have to scan this and enter this evaluation form. Complete the evaluation. so you can get your cpds or your professional development M hours yes development hours so you can claim it from here so I will freeze this screen so you can have time to scan or maybe you want to type in your browser either way okay, so feel free to do that, yeah, thank you very much for your participation, I really appreciate it, I really appreciate your questions and your participation and time,Please forgive us if we say we are not accommodating. all your questions or maybe not all your queries, right Mr.

Sam, sorry, one last word, can we take a group photo? Ah, no problem, so let me stop sharing first, okay, let's take a group photo, so everyone can. you in your video syvia Miss CH, okay AR one, okay Mr. Shley, okay, okay, okay, let us a second, let us look at the camera, let us look at the camera 3 2 One Snap, okay , okay, amazing, okay, let me share it. my screen is fine thank you very much everyone thank you very much mr shle yes thank you very much team ldnm and thank you very much mfpc thank you mr sam okay how many participants join the session?