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.

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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.

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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

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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.

The e-invoice workflow

So how does the whole process of sending and receiving of e-Invoice is like and how long does it take for the validation process?

While it involves a series of complex procedures to ensure a safe digital transaction between supplier and buyer, most of the processes will be conducted within the system, and does not require user’s intervention, and for the validation process, according to LHDN, it will be conducted electronically, which can be done instantly or near-instantly.

Step 1: Issuance of e-Invoice.
The whole e-invoice process begins when a sale and or transaction is made (including e-invoice adjustments), which the supplier or sender create and e-Invoice to share to IRBM via Myinvoice Portal or API for validation. For accounting solution such as AutoCount, this feature is connected through API, by including e-Invoice within our system, users can have a more complete and automated invoicing process, without the need of accessing portal often to send and receive invoices.

Step 2: Validation of e-Invoice.
As the submitted data needs to be validate before release, to ensure the e-Invoice meets the necessary standards and criteria, and according to info provided by LHDN, the validation process by IRBM is in real time or near-instantly.

After the validation process, the supplier will receive a Unique Identifier Number from IRBM within the platform they operates on, and the number will allow IRBM to trace as to reduce instances of tampering with e-Invoice, further strengthen the transaction’s safety and transparency.

Step 3: Notification of validated e-Invoice.
After e-Invoice validation, IRBM will notify both supplier and buyer, either in MyInvoice Portal or APIs.

Step 4: Sharing of e-Invoice.
Upon validation, the supplier is obliqued to share the cleared e-Invoice with the buyer, with a QR code embedded within, which the purpose is to validate the existence of the e-invoice by enablling checking or view in official MyInvois portal.

Step 5: Rejection/Cancellation of e-Invoice.
After the e-Invoice has been issued, a stipulated period of time is given, to allow buyer to request for rejection of the invoice or supplier to cancel the e-Invoice in the process. In this stage, any rejection or cancellation request must be accompanied by justifications.

Step 6: MyInvois Portal.
While there might seems like there are a series of complex procedures involved to send and share invoices, but worry not, with solution such as AutoCount, the e-Invoice feature will be embedded within the system, which users only have to select or enter some basic detail to generate invoices, and let the system automates the rest while keeping you updated, integrating official e-Invoicing within the system also maintain a better data integrity, accuraccy and safety.