Self-Billed e-Invoice: You Are Probably Using It Wrong

One of the most widespread misconceptions in Malaysia's e-Invoice rollout is that buyers must issue a self-billed e-Invoice whenever a supplier fails to do so. This assumption is not only incorrect — it may expose your business to compliance risks.

The myth behind "self-billed e-Invoice: you are probably using it wrong"

When a supplier does not issue an e-Invoice, many buyers instinctively assume they must step in and issue a self-billed e-Invoice on the supplier's behalf. The reasoning sounds logical on the surface: if someone doesn't do their job, you do it for them. In e-Invoice compliance, however, this logic does not hold — and acting on it incorrectly is exactly the kind of mistake this article aims to help you avoid.

Important: Self-billed e-Invoice is not a catch-all substitute for a missing supplier e-Invoice. It is a specific mechanism reserved for specific circumstances defined by the Inland Revenue Board (LHDN).

When can self-billed e-Invoice actually be used?

Self-billed e-Invoice is only permitted under nine specific circumstances. If your transaction does not fall within one of these categories, you are not allowed to issue one — regardless of whether your supplier has issued an e-Invoice or not.

1. Payments to agents, dealers, distributors, etc.

2. Goods or services from foreign suppliers

3. Profit distribution (e.g., dividends)

4. E-commerce transactions

5. Pay-outs to betting and gaming winners

6. Transactions with non-business individuals

7. Interest payments

8. Insurance claims, compensation or benefit payments

9. Capital reduction, share redemption, buyback, return of capital or liquidation proceeds

So what should a buyer do instead?

If your supplier has not issued an e-Invoice and your transaction does not fall within the nine permitted circumstances, here is the correct course of action. The key is to first establish whether the supplier is even obligated to issue e-Invoices.

Step 1 — Determine the supplier's e-Invoice status

Send the supplier a Vendor E-Invoice Status Confirmation Form to formally establish whether they have implemented e-Invoice. A template for this form is available in the Checked – Mastering e-Invoicing Practitioner's Guide.

Step 2a — If the supplier has not implemented e-Invoice

You are not required to take further action. The supplier's normal invoice or receipt is sufficient to support your tax purposes during the transition period.

Step 2b — If the supplier has implemented e-Invoice

Formally request the e-Invoice from the supplier, preferably via email, so you have a written record of the request.

Step 3 — If the supplier still does not provide an e-Invoice

Keep your proof of request (e.g., the email thread). The supplier's ordinary invoice or receipt may still be used for tax purposes. Your documentation of the request serves as evidence of due diligence.

A clear division of responsibilities

Understanding who is responsible for what is fundamental to staying compliant — and avoiding unnecessary administrative burden.

Supplier's responsibility

The obligation to issue an e-Invoice rests with the supplier. A buyer is not required — and in most cases not permitted — to issue a self-billed e-Invoice simply because the supplier failed to act.

Buyer's responsibility

The buyer's obligation is to request an e-Invoice from a supplier who has implemented e-Invoice. Keeping documented proof of this request is essential — it demonstrates compliance even when the supplier does not follow through.

Bottom line: Do not issue a self-billed e-Invoice just because your supplier hasn't. Check whether the transaction falls within the nine permitted circumstances. If it doesn't, request the e-Invoice through proper channels, document your request, and rely on the supplier's invoice or receipt in the meantime. The responsibility to issue lies with the supplier — not with you.