Financial Institutions and e-Invoicing Compliance in Malaysia
The execution of e-Invoicing in Malaysia presents an organized method to issue invoices for financial institutions while making sure e-invoicing compliance with the Financial Services Act 2013 (FSA) and Islamic Financial Services Act 2013 (IFSA).
A few key considerations for financial institutions transitioning to e-Invoicing:
1. Customer’sapproval for e-Invoices
It is important for financial institutions to take customer’s consent or approval in order to align the e-invoicing compliance with FSA and IFSA regulations. This protects confidentiality and aligns with data protection laws.
2. Consolidated e-Invoices – description field
For e-invoicing in financial institutions, it is not mandatory to disclose the statement or bill reference numbers in the “Description of Product or Service” field. As an alternative, institutions should make sure the presence of relevant descriptions that are in line with the regulatory standards.
3. Income from Overseas Branches
Income generated by both Malaysia and overseas branches must be accounted for and e-invoice must be issued by resident financial institutions that are running a banking business. They must be mindful to ensure complete e-invoicing compliance in all their transactions.
4. Customer-Issued e-Invoices for Income Received
Income received through sources such as interest on fixed deposit, financial institutions must issue e-Invoices as and when it is requested by the customer. An e-invoice containing reports of sums due and received guarantees transparency thus firming up e-invoice compliance.
5. Consolidated e-Invoices for Non-Requested Transactions
In cases, where the consumers do not explicitly require an e-invoice, financial institutions can issue a consolidated e-invoice. E-invoicing compliance guidelines mentioned in in Section 3.7 of the e-Invoice Specific Guideline document should be followed to avoid any errors.
6. Loan Repayments and Interest
There is no requirement for financial institutions to issue