E-Invoice Guide for E-Commerce Industry

The Lembaga Hasil Dalam Negeri (LHDN) released a set of Frequent Asked Questions (FAQs) on December 22, 2023, specifically tailored for the e-commerce industry. Here's a breakdown and summary of key points regarding e-invoice implementation:

When a sale or transaction is done through e-commerce platform (e.g. Lazada, Shopee, etc.) which party (e.g. e-commerce platform or merchant) is responsible for issuance of e-Invoice to the consumer?

The e-commerce platform provide is responsible for issuance of:

1. e-Invoice (upon request); or

2. receipt (if no e-Invoice is requested)

To consumer for transaction concluded through the e-commerce platform. Merchants are not required to issue the e-Invoice or receipt to the consumer.

Where the Buyer did not request for an e-Invoice, the e-commerce platform provider is allowed to issue a consolidated e-Invoice for the said transactions with consumers.

Which party (e.g. merchant and/or service provider or e-commerce platform provider) is responsible for issuance of e-Invoice to record the income generated by merchant and/or service provider (e.g. logistics provider) from transactions concluded through an e-commerce platform?

The e-commerce platform provider is responsible to assume the role of Issuer and issue a self-billed e-Invoice to record the merchant and/or service provider's income earned from transactions concluded through the e-commerce platform.

What is the e-Invoice treatment for charges imposed by e-commerce platform provider for the use of platform?

The e-commerce platform provider is required to issue an e-Invoice for the charges imposed to merchant and/or service provider for the use of platform.

Will e-commerce platform provider be allowed to issue consolidatede e-Invoice to record the income generated by merchant and/or service provider from e-commerce transactions?

No, the e-commerce provider is not allowed to issue consolidated e-Invoice to record the merchant and/or service provider's income earned from transactions concluded through the e-commerce platform.

E-commerce platform provider is required to issue self-billed e-Invoice instead of consolidated e-invoice in this instance.

When should an e-Invoice be issued by e-commerce platform provider to record the income generated by merchant and/or service provider from e-commerce transactions?

E-commerce platform provider is allowed to follow the current biling arrangement which generally release the payment received from consumer to the merchant and/or service provider upon consumer's confirmation on receipt of goods and/or services.

Where required, the e-commerce platform provider may issue draft / proforma invoices to merchant and/or service provider. However, only the final e-Invoice is required to be submitted to LHDN for validation.

What is the e-Invoice treatment for return of goods where monies are being returned by the e-commerce platform provider to the affected consumer?

A refund note e-Invoice is required to be issued by the e-commerce platform provider to record the refund on the goods returned.

Can retailers include e-commerce transactions in the same consolidated e-Invoice as brick-and-mortar store transactions?

As the transaction flow, responsibility and classification could be different between the e-commerce transactions and transactions through brick-and-mortar stores, it may not be advisable to issue a consolidated e-Invoice as it may create more confusion in future reconciliation.

Please do not hesitate to contact us for e-Invoice implementation and consultation at:

Ten Jia Sheng

014-911 1880

jsten@jsc-corp.com