As Malaysia pivots toward a fully digital tax ecosystem, the “Self-Billed e-Invoice” has become a major talking point. A common misconception is that you must self-bill every time a supplier fails to provide an e-Invoice.
The reality? It’s not a catch-all solution.
According to LHDN (Inland Revenue Board of Malaysia) guidelines, self-billing is mandatory only for specific transactions classified as “Special Payments.” Before you hit “submit” on a self-billed invoice, check if your transaction falls into one of these nine categories.
The 9 Scenarios for Mandatory Self-Billed e-Invoices
1. Incentives, Commissions, and Rebates
If you are paying incentives or commissions to agents, dealers, or distributors, the responsibility for the e-Invoice falls on you (the payer), not the recipient.
2. Importation of Goods and Services
When dealing with foreign suppliers, they aren’t part of the LHDN MyInvois system. Therefore, to claim your input tax or business expense, you must issue a self-billed e-Invoice for all imported goods and services.
3. Profit Distribution (Dividends)
While dividends from companies (like a Sdn Bhd or Bhd) are currently exempt, other forms of profit distribution to partners or investors require a self-billed e-Invoice.
4. E-Commerce Platform Fees
If you sell on platforms like Shopee or Lazada, the fees and charges deducted by the platform are considered Special Payments. You must self-invoice these costs.
5. Lottery and Gaming Winnings
Licensed gaming operators must issue self-billed e-Invoices when paying out prizes or winnings to lucky winners.
6. Payments to Private Individuals
This is a common one for SMEs. If you pay an individual who is not conducting a registered business, you must self-bill.
- Examples: Rent paid to a private landlord, or a referral fee paid to a friend/employee.
7. Interest Payments
If you are paying interest to an individual or another company (e.g., a private loan), you must self-bill.
Note: Payments to licensed financial institutions (Banks) are the exception—the bank will issue the e-Invoice to you.
8. Insurance Claims and Payouts
Insurance companies are required to issue self-billed e-Invoices whenever they make a claim payout to a policyholder, whether the recipient is an individual or a business.
9. Capital Reduction and Share Buybacks
When a company returns capital to its shareholders—either through a formal capital reduction exercise or by buying back its own shares—this is classified as a Special Payment requiring a self-billed e-Invoice.
The table below outlines the updated scenarios and the respective roles of suppliers and buyers for self-billed e-invoices:
| No | Transaction | Supplier | Buyer |
| 1 | Payment to agents, dealers, distributors, etc. | Agents, dealers, distributors, etc. | Taxpayer making the payment |
| 2 | Goods sold or services rendered by foreign suppliers | Foreign Seller | Malaysian Purchaser |
| 3 | Profit distribution (e.g., dividend distribution) | Recipient of the distribution | Taxpayer making the distribution |
| 4 | E-commerce transactions | Merchants, service providers | E-commerce / Intermediary platform |
| 5 | Pay-out to all betting and gaming winners | Recipient of the payout | Licensed betting and gaming provider |
| 6 | Acquisition of goods or services from individual taxpayers who are not conducting a business | Individual taxpayers providing goods or services | A person acquiring goods or services |
| 7 | Interest payment | Recipient of interest payment | Taxpayer making the interest payment |
Quick Reference Summary
| Category | Do you need to Self-Bill? | Key Exception |
| Foreign Suppliers | Yes | N/A |
| Agents/Dealers | Yes | General employees (Payroll) |
| Private Landlords | Yes | Commercial REITs/Property Companies |
| Bank Interest | No | The Bank issues the invoice |
| Sdn Bhd Dividends | No | Currently exempt |
Key Takeaway
A self-billed e-Invoice isn’t a “fix” for a lazy supplier; it is a specific regulatory requirement for these nine scenarios. Misclassifying these payments can lead to compliance headaches down the road.