Self-Billing
Learn what self-billing means, to understand when your business needs to submit self-billed e-invoices
What is self-billing?
Self-billing is when the buyer reports certain expenses, such as purchases from foreign suppliers, on their own. Since foreign suppliers aren’t required to issue e-invoices, the buyer must declare these expenses directly.
By doing so, the buyer takes on the supplier’s role and submits the e-invoice for LHDN's validation. Once validated, the buyer can use the e-invoice as proof of expense for tax purposes.
When am I required to submit?
Source: LHDN, E-Invoice Specific Guideline
(a) Payment to agents, dealers, and distributors
(b) Goods sold or services rendered by foreign suppliers
(c) Profit distribution (e.g., dividend distribution)
(d) Electronic commerce (“e-commerce”) transactions
(e) Pay-outs to all betting and gaming winners.
(f) Transactions with individuals who are not conducting a business
(g) Interest payments, except in the following cases:
i. Businesses (e.g., financial institutions) charging interest to the public, whether businesses or individuals.
ii. Interest payments made by employees to employers.
iii. Interest payments made by foreign payors to Malaysian taxpayers.
iv. Interest payments to a related company (as defined in the Income Tax Act 1967) incorporated in Malaysia that provides centralized treasury services to its related companies.
v. Late payment interest or charges imposed by Malaysian taxpayers.
Note: The supplier is required to issue an e-Invoice for the exceptions listed above.
(h) Claims, compensation, or benefit payments from an insurance business.
(i) Payments related to capital reduction, share/capital/unit redemption, share buyback, return of capital, or liquidation proceeds.