e-Invoicing 2024: Expenses inccured on Behalf of the Employer

• What are the common expenses employees incur on behalf of employers?

An individual under a contract of service (i.e. Employment) may incur certain expenses on behalf of the employer. Such expenses include, but not limited to, accommodation, toll, mileage, parking, telecommunication expneses, expenses incurred in a foregin country.

• How do employees currently claim expenses from their employer?

Employees submit their claims to employers by providing supporting documents such as bills, receipts, invoices, or payment slips to verify the authenticity of the expenses.

• What changes will e-Invoicing bring to employee expense claims?

  • Employees will need to request suppliers to issue e-Invoices in the employer’s name to serve as proof of expenses for tax purposes.
  • Where this isn’t feasible, businesses will be allowed to proceed with the use of e-Invoice issued in the name of the employee or existing supporting documentation (Traditional) to support the particular transactions as proof of expense for tax purposes.
  • In the event where employees paid for expenses incurred overseas, both employer and employee are not required to issue a self-billed e-Invoice.
    As such, IRBM will accept the foreign bills / receipts / invoices or existing supporting documentation as a proof of expense.

*This exception will only be applicable if the employer is able to prove that the employee is acting on the employer’s behalf in incurring the expenses.

• What are the steps involved in handling e-Invoicing for employee expenses?

  Step 1:
  For any expense claim to be made by employees, employees should first seek confirmation with the Supplier if the e-Invoice can be issued in the name of the employer (as Buyer).

  Step 2:
  Where an e-Invoice can be issued to the employer, the employees should provide the details of the employer in order for the e-Invoice to be issued to the employer.

  Where Step 1 is not possible, the employees should provide their individual details to the Supplier for issuance of e-Invoice to the employee (as Buyer).

  Step 3:
  Payment will be made by the employees upon receiving the validated e-Invoice from the Supplier.

  Step 4:
  Employees submit their expense claim by submitting the validated e-Invoice (be it issued in the name of the employer or employee) as supporting document to the employer.

• Is there a way to better understand the mechanism, implementation and workflow for e-Invoice?

Yes, you can gain further insights into the e-Invoice mechanism and workflow by referring to the official guidelines published by the Inland Revenue Board of Malaysia (IRBM).

• • • Download e-Invoice Guideline Version 4.0 (published on 04 October 2024)
    • Download e-Invoice Specific Guideline Version 3.1 (published on 04 October 2024)
    • View e-Invoice Illustration Guide (Updated on 11 September 2024)
      

You may also consider attending e-Invoice training courses for detailed guidance.

For more information or to register, please visit the contact link below: ANCGroup_E-Invoice Courses Contact.