On 1 August 2024, Malaysia’s e-invoicing mandate came into force, requiring businesses to record all sales and expenses through electronic invoices. While suppliers are usually responsible for issuing e-invoices, there are situations where they cannot — for example, when dealing with foreign vendors outside the MyInvois system, unregistered suppliers, or certain payments like agent commissions and dividends.
In such cases, the buyer must generate a self-billed e-invoice to comply with the Inland Revenue Board of Malaysia (LHDN). This mechanism is especially important for cross-border transactions, e-commerce, and payments to individuals not carrying on a business.
This guide explains what self-billed e-invoices are, when they are required, the step-by-step process, exemptions, and real-world examples — ensuring your business remains compliant and audit-ready.
Key Takeaways
Definition & Purpose
A self-billed e-invoice is issued by the buyer instead of the supplier, required when suppliers cannot generate e-invoices (e.g., foreign vendors, unregistered sellers, intermediaries).
Compliance Requirement
Mandated by LHDN under Malaysia’s e-invoicing framework to ensure accurate expense documentation, tax compliance, and audit readiness.
When Required
Applies to scenarios like payments to agents, foreign supplier transactions, profit distributions, e-commerce, gaming payouts, and certain interest payments.
Issuance Process
Buyers submit details to LHDN via MyInvois Portal/API, receive validation (QR code + Unique ID), share with suppliers, and maintain records for audits.
Exemptions
Not required for employment income, pensions, alimony, zakat, certain dividend distributions, and other LHDN-specified exemptions.
What Is A Self-Billed E-Invoice?
A self-billed e-invoice is an electronic invoice generated by the buyer, rather than the supplier, to record a transaction under the LHDN e-Invoice Guidelines. While standard e-invoices are typically created and submitted by suppliers through Malaysia’s MyInvois system, self-billed e-invoices are required when the supplier is unable or not obligated to issue one—for example, in transactions involving foreign vendors, unregistered sellers, or intermediaries.
Consider this scenario: a Malaysian company purchases machinery from a foreign supplier who does not use the MyInvois system. To remain compliant, the Malaysian buyer must create and submit a self-billed e-invoice to properly document the expense for tax purposes. Although the technical requirements mirror those of standard e-invoices—including validation via the MyInvois Portal or API—the key difference is that the buyer assumes the role of issuer, ensuring the transaction is accurately recorded for LHDN reporting and audit readiness.
Why Is A Self-Billed E-Invoice Required?
A self-billed e-invoice is crucial for proving business expenses and ensuring compliance with Malaysia’s e-invoicing framework. When suppliers such as foreign vendors, unregistered sellers, or intermediaries cannot issue e-invoices, the buyer must generate one. This process not only satisfies LHDN requirements but also strengthens audit readiness, providing verifiable evidence of expenses. By issuing self-billed e-invoices, businesses substantiate payments, avoid non-compliance penalties, and maintain transparent financial records—making them indispensable for both cross-border transactions and domestic dealings with non-registered suppliers.
Read: A Complete Guide To E-Invoice In Malaysia
When Is A Self-Billed E-Invoice Required?
In Malaysia, buyers must issue a self-billed e-invoice whenever the supplier is unable to generate one. This requirement ensures that all transactions are properly documented, deductible, and compliant with LHDN regulations.
Key scenarios include:
- Payments to agents, dealers, and distributors: When commissions or incentives are paid, the buyer issues the e-invoice to ensure proper reporting.
- Cross-border transactions with foreign suppliers: Buyers must self-bill when purchasing goods or services from overseas vendors who do not use the MyInvois system.
- Profit distributions (dividends): Taxpayers distributing dividends must generate the e-invoice for transparency and compliance.
- E-commerce transactions: Online platforms and intermediaries issuing payouts to merchants or service providers are responsible for creating self-billed e-invoices.
- Gaming, betting, and special-case payouts: Licensed operators must self-bill for winnings and similar payments (with exemptions for certain cases, e.g., casino payouts).
- Purchases from individual taxpayers: When buying goods or services from individuals not engaged in business, the buyer generates the e-invoice.
- Interest payments (with exceptions): Required for certain interest-related payments, except when exempted (e.g., public financial institution charges, employee-to-employer interest, or payments from foreign entities to Malaysian taxpayers).
The following table summarizes the types of transactions, buyer responsibilities, and supplier roles:
| No. | Transaction Type | Supplier Role | Buyer Responsibility |
| 1 | Payments to agents, dealers, distributors | Agents / dealers / distributors | Issue self-billed e-invoice for commissions or incentives |
| 2 | Goods or services from foreign suppliers | Foreign vendor (non-MyInvois user) | Malaysian purchaser issues self-billed e-invoice |
| 3 | Profit distribution (dividends) | Recipient of dividend | Taxpayer distributing profits issues e-invoice |
| 4 | E-commerce platform payouts | Merchants / service providers | Platform generates self-billed e-invoice for merchant payout |
| 5 | Gaming, betting, and special-case payouts | Recipient of winnings | Licensed operator issues self-billed e-invoice (some exemptions apply) |
| 6 | Purchases from individual taxpayers | Individual (not in business) | Buyer generates e-invoice to record the expense |
| 7 | Interest payments (with exceptions) | Recipient of interest | Buyer issues self-billed e-invoice unless exempted by LHDN |
By following these guidelines, businesses in Malaysia can maintain compliance, ensure proper record-keeping, and avoid potential penalties for failing to issue required self-billed e-invoices.
Read: Malaysia E-Invoicing System: What Businesses Need to Know
Steps To Issue A Self-Billed E-Invoice In Malaysia
Issuing a self-billed e-invoice in Malaysia is similar to generating a regular e-invoice, with the main difference being that the buyer acts as the issuer. Following the correct procedure ensures compliance with the Inland Revenue Board of Malaysia (LHDN) and provides proper documentation for tax purposes.
1. Submission of Transaction Details to LHDN
When a transaction requires a self-billed e-invoice, the buyer uploads all necessary transaction details to the LHDN via the MyInvois Portal or through API integration. Key information includes:
- Supplier’s name, TIN, and address
- Transaction description, quantity, unit price
- Tax type, rate, and total payable amount
2. Validation by LHDN
After submission, LHDN validates the self-billed e-invoice. Upon successful validation:
- A QR code is generated for verification
- A Unique Identification Number (UIN) is issued
This step ensures that the self-billed e-invoice meets the technical and regulatory requirements.
3. Notification to Supplier and Buyer
Once validated, both the supplier and buyer receive notification of the approved self-billed e-invoice.For foreign suppliers or businesses outside Malaysia, notification may be optional if they do not have access to Malaysian communication channels.
4. Sharing the Validated e-Invoice with Supplier
After validation, the buyer can share the self-billed e-invoice with the supplier. The embedded QR code allows the supplier or regulatory authorities to verify the authenticity of the invoice.
5. Record-Keeping and Retrieval for Compliance
The validated self-billed e-invoice must be stored securely by the buyer for audit and compliance purposes. Businesses can request and retrieve copies of the e-invoice from LHDN and maintain records in digital or physical formats as required by Malaysian e-invoicing regulations
Details Required For Self-Billed E-Invoice In Malaysia
Creating a self-billed e-invoice requires careful input of supplier, buyer, and transaction information to ensure compliance with the Inland Revenue Board of Malaysia (LHDN) and e-invoicing regulations. Below are the essential details that must be captured:
1. Supplier Information
The buyer must provide complete supplier details, even if the supplier is unable to issue the invoice:
- Name: Full legal name of the supplier (business or individual).
- Tax Identification Number (TIN): Mandatory for all suppliers.
- For Malaysian individuals providing only MyKad/MyTentera: use “EI00000000010”.
- For foreign businesses without TIN: use “EI00000000030”.
- Registration/Identification/Passport Number:
- If unavailable, enter “NA” or use the general TIN for non-Malaysians.
- Address: Business or residential address. If unavailable, enter “NA”.
- Contact Number: Telephone number of the supplier.
2. Buyer Details
As the issuer of the self-billed e-invoice, the buyer’s information must be included:
- Name, business registration number, and contact details.
- Role as the entity responsible for generating the self-billed invoice.
3. Transaction Specifics
The self-billed e-invoice must clearly describe the transaction, including:
- Product/Service Description: Detailed explanation of goods or services provided.
- Quantity and Unit Price: Number of units purchased and price per unit.
- Tax Type, Rate, and Amount: Applicable Sales & Services Tax (SST) or other tax information.
- Total Payable Amount: Sum of all charges including taxes.
4. Special Instructions for Foreign Suppliers
When dealing with foreign suppliers, certain placeholders are necessary if information is unavailable:
- TIN or registration number: Use “NA” or “EI00000000030” as applicable.
- Address or contact number: Use “NA” if not provided.
- Currency exchange rate and customs details: Include when relevant for cross-border transactions.
5. Optional Fields
While not mandatory, including optional fields can improve tracking and compliance:
- SST Registration Number: If the supplier is registered. Otherwise, input “NA”.
- Malaysia Standard Industrial Classification (MSIC) Code: Useful for categorizing products or services.
- Internal e-Invoice Number: Reference number used for internal record-keeping.
Self-Billed E-Invoice Exemptions in Malaysia
While Malaysia’s e-invoicing mandate requires buyers to issue self-billed e-invoices in certain scenarios, the Inland Revenue Board of Malaysia (LHDN) has identified specific exemptions where self-billed e-invoices are not required. Understanding these exemptions helps businesses avoid unnecessary compliance burdens.
1. Employment Income, Pension, and Alimony
Self-billed e-invoices are not required for payments related to:
- Salaries and wages paid to employees
- Pension contributions or payouts
- Alimony or maintenance payments
These payments fall outside the scope of typical business transactions that necessitate e-invoicing.
2. Dividend Distributions for Certain Entities
Self-billed e-invoices are exempted in dividend distribution cases under the following conditions:
- Taxpayers not entitled to deduct tax under Section 108 of the Income Tax Act 1967
- Businesses listed on Bursa Malaysia distributing dividends
3. Zakat Payments
Religious obligations such as zakat payments are also excluded from self-billed e-invoice requirements. This exemption aligns with LHDN’s recognition of certain charitable or religious disbursements as outside the scope of taxable transactions.
4. Other Exemptions Defined by LHDN/LHDN Guidelines
Additional exemptions include:
- Payments to individuals not conducting a business
- Interest payments to the public at large
- Claims or benefits paid by insurance companies to individuals or government entities
- Specific securities-related transactions
These exemptions are outlined in the e-Invoice Specific Guidelines (Version 4.1) and help buyers avoid issuing self-billed e-invoices where LHDN considers it unnecessary.
Example Of A Self-Billed E-Invoice In Malaysia
To better understand how self-billed e-invoices work, consider the following realistic scenario:
Example:
A Malaysian company, ABC Sdn Bhd (Buyer), purchases machinery worth RM50,000 from a foreign supplier, XYZ Inc., who does not use Malaysia’s MyInvois System. Since the supplier cannot issue an e-invoice, ABC Sdn Bhd must generate a self-billed e-invoice to document the transaction and comply with LHDN requirements.
Sample Validated Self-Billed e-Invoice
| Field | Details |
| Supplier Name | XYZ Inc. |
| Supplier TIN | EI0000000010 (foreign supplier without TIN) |
| Supplier Registration/ID Number | NA |
| Supplier Address | NA |
| Supplier Contact Number | NA |
| Buyer Name | ABC Sdn Bhd |
| Buyer TIN | 1234567890 |
| Product/Service Description | Industrial Machinery – Model X100 |
| Quantity | 5 Units |
| Unit Price | RM10,000 |
| Tax Type & Amount | SST 6% – RM3,000 |
| Total Payable Amount | RM53,000 |
| e-Invoice Code/Number | INV-2025-001 |
| Classification Code | 123 |
| LHDN Unique ID | 2025ABCXYZ0001 |
| QR Code | [Embedded QR for verification] |
How This Example Demonstrates Compliance
- Buyer as Issuer: The e-invoice is issued by ABC Sdn Bhd, fulfilling the requirement when suppliers cannot generate e-invoices.
- Accurate Transaction Details: Quantity, unit price, and total amount are clearly documented, along with applicable tax.
- Supplier & Buyer Information: All essential supplier and buyer data are included, using placeholders (e.g., “NA”) for unavailable foreign supplier details.
- LHDN Validation: The invoice includes a Unique Identification Number (UIN) and an embedded QR code, confirming validation via MyInvois.
- Regulatory Compliance: This self-billed e-invoice ensures the buyer can claim the expense and comply with Malaysia’s e-invoicing mandate under LHDN guidelines.
This example illustrates how self-billed e-invoices protect buyers from non-compliance, especially in cross-border transactions where suppliers cannot participate in Malaysia’s MyInvois system. By following this format, businesses can avoid penalties and maintain proper documentation for tax purposes.
Common Errors & How to Address Them in Self-Billed e-Invoices Malaysia
Malaysia’s IRBM rules allow specific time windows for error correction:
- Within 72 Hours
- Buyer: Can reject a validated invoice (wrong product, tax error, etc.).
- Supplier: Can request cancellation if discrepancies exist.
- After rejection/cancellation, buyer reissues corrected invoice.
- After 72 Hours
- Errors can no longer be cancelled.
- Buyer must issue a new corrected invoice and, if necessary, a credit/refund note referencing the original.
Tips to Avoid Errors and Ensure Smooth Validation
To minimise errors and speed up validation:
- Double-Check Supplier Information: Verify TIN, address, contact, and registration numbers before issuing. Use placeholders (“NA”) for missing foreign details.
- Validate Transaction Data: Confirm product/service descriptions, quantities, unit prices, and tax calculations.
- Use LHDN-Compliant Formats: Always issue self-billed e-invoices through MyInvois Portal or API, embedding QR codes and UINs.
- Maintain Records: Keep copies of rejected, cancelled, and corrected invoices for audit purposes.
- Train Staff: Train the team on LHDN e-invoicing rules, exemption cases, and common pitfalls.
Storage & Record-Keeping for Self-Billed e-Invoices Malaysia
Proper storage and record-keeping of self-billed e-invoices are crucial to maintain compliance with Malaysia’s LHDN e-invoicing regulations.
LHDN Database vs. Business Records
- LHDN Database: All validated self-billed e-invoices are stored in the LHDN MyInvois system. Each invoice is assigned a Unique Identification Number (UIN) and a QR code for verification.
- Business Records: Despite LHDN’s storage, businesses must maintain their own internal copies of all self-billed e-invoices for audit purposes. This includes rejected, cancelled, and corrected invoices.
Importance of Proper Documentation
Maintaining accurate records ensures:
- Compliance during LHDN audits.
- Evidence of expense for tax deduction purposes.
- Ability to resolve disputes with suppliers or auditors quickly.
- Efficient reference for accounting and reporting.
Best Practices:
- Store both digital and backup physical copies.
- Organize invoices by date, supplier, or transaction type.
- Ensure records are easily retrievable for at least 7 years, as recommended by LHDN.
Self-Billed e-Invoices for Special Scenarios
Certain business scenarios require additional details to ensure self-billed e-invoices comply with LHDN rules.
Bonded Warehouses & Free Zones
When transactions involve bonded warehouses or free zones:
- Include customs reference numbers (e.g., Form No. 1 or Form No. 9).
- Specify Incoterms to define responsibility for shipping, insurance, and taxes.
- Include product tariff codes to align with customs and import/export documentation.
This ensures the self-billed e-invoice is fully compliant for goods in transit and can be validated correctly by LHDN.
Cross-Border E-Commerce
For international e-commerce transactions:
- Include currency conversion rates and specify the currency used.
- Adjust tax calculations according to Malaysia’s SST or VAT rules, if applicable.
- Provide supplier identification details, even if partial, using placeholders like “NA” for missing TINs or registration numbers.
- Ensure all cross-border documentation aligns with LHDN and customs regulations.
By addressing these scenarios accurately, Malaysian buyers can maintain compliance, minimize errors, and ensure smooth validation of self-billed e-invoices.
Conclusion
Self-billed e-invoices are a vital part of Malaysia’s e-invoicing framework, ensuring that buyers can document expenses accurately when suppliers are unable to issue invoices. By issuing self-billed e-invoices correctly, businesses can maintain compliance with LHDN regulations, substantiate their expenses for tax purposes, and avoid potential penalties. Proper implementation safeguards both operational and financial integrity in line with Malaysia’s e-invoicing mandate.
How FastLane Group Can Help
Ensure 100% LHDN e-invoicing compliance with FastLane Group. Our experts help Malaysian businesses issue, validate, and manage self-billed e-invoices seamlessly, reducing errors and ensuring smooth audit trails. From handling cross-border transactions to special scenarios involving bonded warehouses and free zones, we provide end-to-end support. Contact us today for a personalized consultation and simplify your e-invoicing process with professional guidance.
Frequently Asked Questions (FAQs)
What is a self-billed e-invoice?
An invoice issued by the buyer when the supplier cannot, e.g., foreign vendors, agents, or unregistered sellers.
What details are required?
Supplier and buyer info, transaction details, taxes, total amount; placeholders used where supplier data is unavailable.
Which transactions are exempt?
Salaries, pensions, alimony, zakat, certain dividends, insurance payouts, and non-business individual payments.
How to fix errors?
Within 72 hours: reject or cancel. After 72 hours: issue corrected invoice or credit note.
