Implementation of e-Invoice in Malaysia for Telecommunication Industry

Telecommunication Industry in Malaysia has a detailed history and since then it has undergone various changes which paves its way to become one of the industry powerhouse. With its rapid expansion, it is growing at a faster pace. With the introduction of e-Invoicing, things are going to change in the sector. In telecommunication sector, B2C type of customers occupy a greater proportion and hence it is a very significant step. 

In this article, we will delve into functionalities of implementation of e-Invoicing in Malaysia for telecommunication Industry.

Timelines of implementation of e-Invoicing in Malaysia

The Malaysian government has announced updated timelines for the mandatory implementation of e-Invoicing. These dates are structured into five phases, based on the annual turnover of businesses, allowing for a smoother transition and sufficient preparation time. Here are the revised timelines:

From normal traditional billing system to billing through e-Invoicing, can be a tedious task but if the process is followed smoothly, then it would be a cakewalk. For implementation of e-Invoicing in Malaysia, the Government has given two choices either directly through My Invois portal or through e-Invoicing software which will involve API’s etc. As, the quantum of bills to be issued is very high, it is preferred to use e-Invoicing software in Malaysia. For implementation of the same, following process should be followed:

Project Planning 

Planning is the root of every project. Proper planning and setting timelines to it is must before beginning the project. In this stage, it is important to set the project goals, identifying key stakeholders, documenting the current workflow, and setting budgets etc.

Project Finance

Subsequent to the finalization of budget, mediums through which the project should be financed should also be identified. After it has been identified, it is essential to act upon the same. Furthermore, a leeway funds should also be kept.

Choosing and evaluation of vendor

According to the budget, the vendors must be shortlisted and identified. Once the vendors have been shortlisted, each of those should be evaluated. The vendors should be evaluated based on experience, budgets, quality of services provided, etc. Subsequent to choosing of vendor, steps must be taken to kick off the project. There should be detailed discussion with vendor and the key stakeholders of the telecommunication company and the vendors should be aligned.

Finalization of the project

There should be regular meetings at fixed intervals with the vendors. The progress of the project should be monitored. Before taking handover of the project, the telecommunication company must test the same. After all the necessary things have been done, the project should be finalized.

With its implementation, there are various questions which arise in the mind of a professional. Some of them are-

Q1. While billing the customers, the telecommunication service providers would reflect the adjustments with respect to previous billing or tax periods in the coming months. How should the same be dealt with?

 A1. The telecommunication service provider can operate in accordance with the current business practices. Implementation of the same would not have a great impact. The telecommunication service provider can issue credit note/debit note/refund note e-Invoice.

Q2. In case of prepaid billing system, the telecommunication service provider bills to the provider who sells the plans to customers. How would the same impact?

 A2. The telecommunication provider is allowed to follow the current business model.

 Q3. While providing add on services, where customers settle their payment through telecommunication service providers, which party should be responsible for issuance of e-Invoice to the customer?

 A3. In case where the third-party vendor, is a local entity, the third party vendor would issue an e-Invoice to the customer.

In case where the third-party vendor is a foreign entity, the customer will issue a self-based e-Invoice. Further, for any platform fees/charges, the telecommunication service provider is required to issue an e-Invoice

Q4. The telecommunication service provider often operates their business in a rented premises which are owned by individuals and or/companies, in such a scenario how would implementation of e-Invoice make an impact?

 A4. If the landlord is an individual conducting business or a company, they would be required to issue an e-Invoice to record the income earned from the rented premises.  In case he is an individual who is not conducting business, the telecommunication service provider is responsible to assume the role of Issuer and issue a self-based e-Invoice to substantiate the transaction for tax purpose.

Benefits of e-Invoice in Malaysia for Telecommunication Industry

• e-Invoices will reduce administrative costs. With implementation of it, the human resources could be employed in other tasks.
• e-Invoicing would accordingly bring the authenticity of the invoice.
• The government can-do real-time audits by leveraging data analytics and other methods through technology.
• It will provide a greater visibility to business activities.

Conclusion 

The benefits of e-Invoicing are more than disadvantages. The transition of the same would take time, but once implemented it would benefit the Industry at large. With its implementation, a transparent process would benefit both the company and the tax authorities.