Managing Gift Vouchers in Malaysian e-Invoicing: Refundable and Non-Refundable

In Malaysia, the Inland Revenue Board (IRBM) mandates e-invoicing compliance across various transactions, including the vouchers. Gift vouchers, whether refundable or non-refundable, require unique treatment in e-invoicing due to the complexities they introduce in payment processing and compliance tracking. 

This guide explains the types of vouchers, when they are typically used, and their specific treatment in e-invoicing under Malaysian regulations, simplifying invoicing for businesses and providing clarity for both vendors and consumers.

What is a Gift Voucher?

A gift voucher is a prepaid credit, either monetary or non-monetary, such as a gift card, discount coupon, or loyalty reward. It can be redeemed for goods or services, serving as a prepayment or discount for future purchases.

Gift vouchers can be either refundable or non-refundable and it may be offered to customers for free or sold at full or discounted value, often with specific conditions attached.

How does Gift Voucher work?

A gift voucher is a prepaid card or code that can be redeemed for goods or services at specific stores or online platforms. When a customer buys a voucher, they load it with a set amount of money, which the recipient can then use as payment.

Example:
If you purchase a RM100 gift voucher from a clothing store, the recipient can use it to pay for a RM100 item or use it as a partial payment on a more expensive purchase. If they buy an item worth RM150, they can use the RM100 voucher and pay the remaining RM50 with cash or another form of payment.

Types of Gift Vouchers 

Based on the e-invoicing treatment gift vouchers can be of two main types

Refundable Vouchers

These vouchers are treated like a prepayment, meaning that they can be refunded if unused. For e-invoicing, refundable vouchers are recorded in a manner that doesn’t impact the final payment until they are redeemed or expire.

Non-Refundable Vouchers

Non-refundable vouchers, on the other hand, act as a final payment once sold and do not qualify for a refund. Non-refundable vouchers are often used as an upfront purchase to redeem against future transactions, adding complexity to tax calculations and invoicing.

E-Invoicing Treatment for Refundable Vouchers

Issue of Refundable Voucher

No e-invoice is required if the voucher is issued for free or is refundable by nature.

Redemption of a Refundable Voucher

• An e-invoice is required when a customer redeems a refundable voucher.
• Example: If a customer uses an RM100 refundable voucher on a RM500 purchase, the e-invoice reflects RM500 as the total sale, with RM100 as a prepayment and RM400 as the net payable.
• Since no e-invoice was issued when the refundable voucher was given, ensure the “Total Excluding Tax” matches the transaction’s full sales amount.

Note: Including the voucher as a separate line item on the e-invoice improves clarity, showing prepayments distinctly to comply with standards.

Expiry of a Refundable Voucher

If a refundable voucher expires unused, a self-generated e-invoice must be issued to reflect the voucher’s amount as income. This invoice records the expired voucher’s value as revenue without requiring additional payment from the customer.

E-Invoicing Treatment for Non-Refundable Vouchers

Sale of Non-Refundable Voucher

An e-invoice must be issued at the time of sale for non-refundable vouchers.

Redemption of a Non-Refundable Voucher

• An e-invoice is also required when a customer redeems a non-refundable voucher.
• Example: If a customer applies a RM100 non-refundable voucher on a RM500 purchase, the e-invoice shows RM400 as cash or credit and RM100 as a separate line item for the voucher. This setup ensures transparency and properly reflects the total transaction value.
• Since an e-invoice was issued when the voucher was sold, ensure the “Total Excluding Tax” reflects only the remaining payable amount after the voucher is applied.

Expiry of a Non-Refundable Voucher

No additional e-invoice is necessary if a non-refundable voucher expires. The IRBM allows businesses to record it directly in their accounts, simplifying the process for unused non-refundable vouchers.

Handling Free Vouchers or Purchase-with-Purchase (PWP) Vouchers

If a voucher is provided for free or as part of a promotion (e.g., PWP vouchers given upon a certain spending threshold), no e-invoice is required at the time of issuance. 

However, if the PWP voucher is redeemed, the business needs to issue an e-invoice that accounts for any sales made using the voucher.

ClearTax Portal Features for Voucher Handling

ClearTax’s e-invoicing platform streamlines voucher invoicing by offering prepayment options for line items, allowing easy categorization and reporting of refundable and non-refundable vouchers. This automated feature simplifies tracking and ensures compliance with Malaysian regulations for both voucher types.

Conclusion

By adhering to the specific treatments outlined for refundable and non-refundable vouchers, businesses in Malaysia can seamlessly comply with IRBM’s e-invoicing regulations, ensuring transparency and accuracy in their invoicing processes. ClearTax’s e-platform for e-invoicing further enhances this process by offering a comprehensive and automated solution, simplifying voucher management and enhancing the overall customer experience.