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E invoice format for Nonprofit

good morning good morning good morning missim good morning Mr today is 12 of April April 2024 yes so basically today we're going to talk about very um trending issues tax issues on E invoice so um I think lately people have been talking about invoice in great length right correct I think clients have been calling us up and down inquiry about uh certain issue on E invoice yes so today today um we take this opportunity to record a webinar so that um we will cover today we're going to break into a few series on E invoicing today we're going to talk about the basic understanding of invoice yes okay basic so um before we proceed let me introduce myself my name is Mr Co ping I'm the group principal of KTP we are the proof Auditors and tax agent in joobu with me is mlim mlim why not hello everyone I'm mlim uh client relations representing uh KTP and dhk okay okay let's go straight to the topic okay what is e invoice uh e invoice uh defined in the finance act uh 2023 it described is an invoice or any documents issued by a person regarding the goods and services performs and this require approval or validation by the inan revenue board which is the DG so in layment terms is actually is a digital uh represent uh representations of document of a transaction between the supplier and the buyer so this will this when employees come in it will replace the paper or electronic documents such as uh invoices uh credit note debit note uh and this is almost a real time uh validations and uh the platform allows you to store this document in IRB uh portal okay I think um let let let me explain in simple terms like okay um currently we issue in we issue invoice manually manually okay deliver yes meaning it can be by hands it can be by hands or it can be throughout the computer system accounting software like SQL Auto count whatever software in malayas okay so basically it's like I give you invoice yes simple as that okay I think if the E invoice we need to go through a systems a systems that administrate by Inland Revenue uh irbs okay so basically when we issue the invoice we need to go through the system in I portals okay so when the portal will do some validations then they will send back to the s customers simple as this it means it's go through a process in in AK okay so all the invoice will need to go through the process and then be before sending to the customers rather than current system is whereby simple no third party verifications okay so um people ask me a lot of questions it is ban Malaysia or not e invoice why not Muslim uh e invoice consider ban Malaysia but I think uh it will practice worldwide uh so basically and most of the countries has done invoice or is implementing invoice okay it's not invented by our Malaysia governments okay so next question is who is required to implement in voice this uh for this answering this question who is required actually is cover a wide scope it mentioned here it's applied to all taxpayer and undertaking any commercial activities in Malaysia so it covers uh typically transaction between business to business we in short we call it B2B uh business to Consumer B to C and also uh business to government b2g so uh uh uh from the guideline given uh it mention uh it lists out uh the individual and legal entity that uh need to comply with the E invoice it including the associations bodies of person I mean 14 14 persons are uh are required to comply with this invoice so it's starting with from uh Association body of person Branch business trust LLP partnership so means it's cover almost every taxpayer in short if you have tax numbers meaning you are doing business transa you have business transactions you are required to implement and follow e invoice yes okay so I think the next question is who is Exempted I think somebody will be Exempted right correct uh inner Revenue uh issue the guideline also mentions that there are 12 uh IND uh persons are Exempted from uh implementing invoice so uh the it cover the ruler the ruling Chef former ruler the second one the third one is the consult of a ruler of a States uh having the title of rajana rajuri t peruri or peruri followed by the fourth one is the consult of the former ruler of the state and uh the fifth one is the government uh sixth is the state government and state Authority seven is the government Authority followed by number eight is the local Authority uh number nine is the statutory Authority or and statutory body then uh 10 facility example like Hospital clinic multi-purpose Hall then 11 the consular office and the last one is is those individual who is not conducting any business so this 12% is uh Exempted from uh implementing the E invoice and also is also uh there's one part uh mentioned uh is those who under the employment who getting salary uh alimon dividend and zakat are also not uh not in the scope of this uh e invoice implementation so let me summarize basically um these 12 categories um we Layman or Street people um first is individual um not carry out bus business it's like hobby you collect stamps uh you collect um Antics Antics or LX was things like that second is um um employees under employment income and third one I think um I think most affected us is um hospitals or clinic like some um General Health Facilities right yeah okay when is the date when the effective date the effective date actually is is effective from 1st January 2024 but uh uh from the guideline we can see that it actually uh uh divide into three stages of uh implementation so uh for those uh targeted taxpayer with the and the first first level is uh those uh taxpayer with annual turnover or Revenue more than 100 million the Implement date is this year 1 August and 2024 2024 yes 2024 this year 1 August Then followed by the second uh second targeted taxpayer is with the annual turnover or Revenue more than 25 million and up to 10 million it's implementation date is starting from 1st January 2025 which is uh next year and uh the rest I mean the rest of the tax payer the uh the implementation date is uh from 1st July 20 025 so meaning all of us should be ready for the E invoice implementation in 1st July 2025 so basically there's three category okay one is first of August for more than 100 Mil okay so second category come next is first of January 2025 it's 25 mil to 200 mil okay the rest balance is 1 of July okay how to determine the annual turnovers any yes this this is a good question uh how to determine uh which category uh on of the implementation date that you need to comply with so it's basically determine the turnover uh Revenue based on uh the year 2022 either if you are a Sr bad you will follow your audited financial statement for the financial year end 2022 uh for those uh taxpayer like uh so proprietor or partnership it will follow your tax uh tax return for ya 2 022 and then if in the event that you have the change of financial year end it basically will Pro rate uh for a period of 12 Years so basically we are looking at Financial audited Financial accounts of 2022 2022 for non Sani Braha we look at the calendar years of 2022 okay uh and here also they highlighted for those compan or taxpayer with backlogs of accounts which they didn't comply you are having hard times to determine when is your implementation date so we really urge for those uh backlog cases uh kindly get your accounts uh done up to date to determine uh your implementation date M so um no the word e invoice I I believe there are some types of many few types of e invoice I heard there's a Consolidated e invoice I heard there's um self-built invoice we you like to elaborate more on what what is the type of e invoice uh the type of e invoice we have the uh uh normal normal then one is the self bu means you build to yourself for example you are trading with the Foreigner uh The Foreigner are unable to follow our rules and guideline so you have to do the self Bill and another one is the Consolidated e invoice where your tax payer maybe is a uh Layman a normal person that they do not require for the E invoice you are able to consolidate it and uh follow it uh at the man I think Consolidated invo e invo also um applicable to specific industry right yes correct what time industry uh B to B B to C consumer M yes so this one will be covered uh more details in our next uh webinar okay interesting the next question is what is the format of invoice any template or not uh Yes actually there are uh uh the we have to first I have to let you know the type of the E invoice to be issue basically there are four type uh three is uh quite familiar to us because our existing practice we have the invoice we have the credit note we have the debit note this one is a consider normal practice but uh it it promote a new new one which is a refund note uh so this is a type of e ins invoice to be issued and then uh the format of the E invoice actually uh it in uh the guideline is uh uh there's a list of appends one and to showing uh 55 uh fields are required in the E invoice so uh and it's categorize into the eight category so uh I let me elaborate further on the eight category number one is the party involved which is the buyer and the supplier followed by the supplier details the second category the third category is the buyer details uh then fourth one is the address fifth contact number six uh invoice detail followed by the seven is the product the details of the product and services and the last one is the payment information and it elaborate further to appendix 2 where there's a shipment uh details on the import or exports of the good this one is more applicable to those uh drop drops shipments uh uh company U nature I mean the business is a drop shipment so that's why you mentioned 55 um FS is required so um I think basically um I think first time of Ru is I think it's very hard to produce a account using menu correct correct um um because um every time if you are doing Manu consider you have to do it quite because 55 fu is quite a lot lot of information perhaps um later we will cover what are the 55 fields which are not normally seen under the current invoicing system okay then you have to send to the Govern pters and then the Govern portter will validate thing like that okay so um my advice is always is very simple contact your accounting vs upgrade your systems okay um basically it will most of vors accounting software vors will comply with this invoicing e invoice system right correct so go back to the 55 what are not commonly seen okay under the current invoicing system uh the tax income tax B number in short we call it uh tin TI n tax identifier number which not commonly seen in the normal imagine you're dealing with a suppliers buyers you first question you ask can I have your income tax number right yes and next next uh basically uh will be on the digital issues digital signature uh and also the QR codes uh will be stemed on the validated uh invoice yes then uh the others business code business code uh MSC code is uh another uh item that required to be in the E invoice so what is business code why is M code uh business code basically is the code number that delegated uh when you registered your company uh with SSM and uh M Ms IC Code there's a six if I'm not mistaken it's a six digits uh of the related field of your nature of business basically every industry in Malaysia every business in Malaysia they have a unique um business Cod business code and IC Code basically you dealing with trading of trading of um Furnitures yeah 1 2 3 4 5 for instance okay um uh trading of um papers n numbers so it's for statistic purpose in Malaysia okay so um um we cover the fields 55 FS um then um we talk about the flow uh old process flows um which I just mentioned really you need to go through the porters and then go back to the buyers okay uh the last one um the last one is um or you want to elaborate more on the process cessful oh uh yes definitely uh I'll elaborate more on the process because L they they come up with a diagram on the process flow in a simplified form so uh the process flow for uh in total there's a six process FL undergone so the first one definitely is the issuance of the E invoice so when a transactions happen is made so the supplier need to create the E invoice and share it to the uh inan Revenue platform so uh here there's a two platform uh introduced by IRB number one is the my invoice portal which is a very simple free temp at this moment is free for the taxpayer to key in the E invoice and another platform is the API uh the API stands for application programming interface where it is a system or software so there's a two platform for you to issue the E invoice followed by the second floow is the validation of e invoice so IB officer they will uh validate the invoice uh almost in a near near real time uh timing and then uh when uh they ensuring the invoice meet the 55 requirements from the eight category they will validate the this invoice so once they validate they will issue uh we call it uh u i uh unique identifying number uh from Irv uh via this uh invoice portal or the API so this what is the usage of this uh uin is basically for you for IRB and also for us to trace back the uh uh the invoices to reduce any uh tempering or modify on the E invoices so basically all documents all e invoice will have a unit number like IC right correct then follow after the validation inam revenue board definitely will inform both party which is the buyer and the supplier that the invoice is valate we are the the portal that they submit in then the fourth one is that uh you as a as a supplier you need to share this invoice to the buyer and then this invoice uh come with a new one is they embedded with a QR code uh so this QR code can be used to Val uh uh can be used to validate the existence and the status of the in invoice so meaning when you as a buyer when you receive the this in invoice it suggest you to scan the QR code to see the genuinity of this uh e invoice in Malaysia we will talk about the consequences okay later on the last part okay okay so when both party the buyer and the seller received the uh validated e invoice uh uh they given a a stipulated period of time for you to either accept or reject this in invoice the so the period of time uh IRB granted is uh 72 hour regardless whether it's a working day or over Saturday and Sunday uh so um so the buyer can request for rejection of the invoice and uh as a supplier also can uh perform to cancel the invoice and then when you want to cancel certain e invoice you require to give a justification meaning you need to give a reason why the invoice is cancelled for example the item is not correct uh the description is not correct all this you you able to reject Then followed by lastly uh the supplier and uh buyer are able to obtain the summary of the IM invoice in the portal so meaning you are able to store your invoices in uh in the system yes so basically this is the six flow of the invoice in general so in nutshells let's um let's summarize the key terminology is the keywords okay the system itself it can be my invoice portals or API from accounting software venters okay second thing is uh validations through un need QR ky1 numb thing like that okay meanings or approve approve uh in voice shall have a unit identifier number u i n in short you call it U I call it IC numbers okay yes um then the third one is once you buyer receive it the buyer have 72 hours to accept or to reject 72 hours meaning about um three days three days three working days or including public holidays or including including meaning you are in let's say you issued you received the invoice on Fridays you need to return back [Applause] if you want to reject you'll be reject before Sunday something like that okay so um it's quite texting put it this way okay so um um as I say you need to go through a system ready you can't do it manually okay yes let's cover the final part for today sharing what is the consequences of non-compliant with this e invoice uh basically in revenue board have highlighted uh two sections on this uh e invoice the first section is uh section 82 C of the income tax act this one is mentioned the duty duty to issue the E invoice so uh at this point of time you as a tax payer you have no reason to argue that uh uh uh I was govern under personal data protection act I don't need to disclose all these things so this one is overrule and Then followed by another section is a section 138 uh bracket 4 where uh income tax given uh Royal Malaysia custom uh uh and excise to obtain the information from the data of the E invoice to exercise the Royal Malaysia custom uh function because why this happen because the import and exports uh the values of the goods by using the different tariff code at for a lower rate so this section come in to avoid this situation basically if you did not uh uh comply with these two section they impose a fine or a compound ranging from uh minimum 200 ring Malaysia up to a maximum 20,000 then it also have uh are able to go I'm sorry uh also have uh imprisonment not exceeding 6 month or both so all this offense is considered under criminal offense let me let me put it there the most important thing okay without the e invoice approv e invoice with uh unit numbers your buyer remember this word your buyer cannot claim tax deduction on all the expenses m cut without approv he invoice okay I think this is the most significance okay no buyer will deal with you anymore just imagine you buy a Goods you buy stationary and you buy papers or something like that without e invoice or without approved e invoice you cannot claim tax deductions okay I think this is the most significance impact impact so one of the reasons why government want to implement this is to eliminate black economy or underground economy okay cor so um if this more or less we cover the first sharing of e invoice um I think will will cover as I say sales bill or Consolidated invoice on the other day we'll cover some specific industry or the other day we'll cover some practical issues or practical operational issues okay with this and thank you Miss L thank you Mr call for the Fantastic uh knowledgeable sharings I see you in next sessions thank you bye-bye see you