The Inland Revenue Board (LHDN) has announced a six-month grace period for businesses to comply with new electronic invoicing (e-invoice) regulations during the initial phase starting August 1. This decision aims to ease the transition for businesses and ensure a smooth implementation process.
Key Points from the Announcement:
1. No Penalties During Grace Period: Datuk Dr. Abu Tariq Jamaluddin, CEO of LHDN, assured that there would be no penalties for businesses during the six-month grace period. This allows businesses ample time to adapt to the new system without the fear of immediate penalties.
2. Consolidated E-Invoice Submission: During this period, businesses are only required to submit a consolidated e-invoice for all transactions. This flexibility extends to all industries and activities, including self-billed e-invoices, making it easier for businesses to comply.
3. Optional Electronic Receipts: Businesses are not obligated to issue electronic receipts to consumers unless specifically requested. Physical receipts remain acceptable during the grace period.
4. Phased Implementation:
Phase 1 (Starting August 1): Mandatory for companies with annual revenue of RM100 million and above.
Phase 2 (Starting January 1 next year): Applies to companies with annual revenue between RM25 million and RM100 million.
Phase 3 (Starting July 1 next year): Includes all remaining micro, small, and medium enterprises. Companies with annual revenue less than RM150,000 are exempt from issuing e-invoices.
5. Incentives for Compliance: To encourage timely adoption, the government will provide incentives for businesses that successfully implement e-invoicing. The capital allowance claim period for the purchase of equipment and computer software packages will be reduced from three to two years for purchases made from the assessment year 2024 to 2025.
6. Flexibility in Transaction Descriptions: Businesses can include any transaction descriptions in the “Product or Service Description” field, allowing for more detailed and accurate invoicing.
7. Government Support: The government is committed to supporting businesses throughout this transition. The grace period is designed to ensure businesses have sufficient time to familiarize themselves with e-invoicing requirements and integrate the necessary systems smoothly. Conclusion: The introduction of the six-month grace period reflects LHDN's understanding of the challenges businesses face in transitioning to e-invoicing. This period allows businesses to adjust and comply with the new regulations without immediate penalties, promoting a smoother and more efficient implementation process. Additionally, the incentives offered by the government aim to reward and encourage businesses to adopt the e-invoicing system promptly.
As businesses prepare for this significant shift, it is crucial to stay informed about the requirements and benefits of e-invoicing. Companies are encouraged to take advantage of this grace period to ensure a seamless transition and avoid future complications.
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