When to Issue a Self-Billed e-Invoice : Only in These 9 Situation

As Malaysia moves towards the full implementation of the electronic invoicing (e-Invoice) system, one of the most common questions businesses ask is:

“If my supplier doesn’t issue me an e-Invoice, do I have to issue a Self-Billed e-Invoice on their behalf?”

The answer is: Not always!

According to the latest guidelines from LHDN (Inland Revenue Board of Malaysia), you’re only required to issue a Self-Billed e-Invoice if the payment you’re making falls under what they define as a Special Payment.

So, before rushing to issue one, take a look at these 9 situations to see if they apply to you 👇

LHDN’s Definition of Special Payments

❶ Incentives or Commissions

Are you paying incentives or commissions?
Is the recipient an agent, dealer, or distributor?

-> If yes, you’re required to issue a self-billed e-Invoice!

❷ Import Goods or Services

Ask yourself:
–  Are you paying a foreign supplier?
–  Are you importing goods or services into Malaysia?

-> If so, this counts as a Special Payment and requires a self-billed e-Invoice

❸ Profit Distribution or Dividend

Are you distributing profits to shareholders or investors?

!! Note: Dividends from companies (e.g., Sdn Bhd / Bhd) are currently exempt from this requirement.

->  Other forms of profit distribution may still require a self-billed e-Invoice.

❹ E-Commerce Platform Fees

Do you pay platform fees to Shopee, Lazada, or other e-commerce platforms?

-> These charges are considered Special Payments and must be self-invoiced.

❺ Lottery or Gaming Winnings

Are you a licensed lottery or gaming operator?
Are you issuing prize winnings to recipients?

-> You must issue a self-billed e-Invoice to the prize winner.

❻ Payments to Individuals

Are you making payments to individuals who are not running a registered business?
Examples:
–  Rental payments to private individuals
–  Referral or commission fees to salaried employees

-> In such cases, you’re required to issue a self-billed e-Invoice.

❼  Interest Payments

Are you paying interest to an individual or a company?
!!  If the payment is made to a licensed financial institution (e.g., banks), they will issue their own e-Invoice — you don’t need to.

-> If it’s not a financial institution, you are responsible for issuing a self-billed e-Invoice.

❽ Insurance Claims

Are you an insurance company making a claim payout?
Are you compensating either an individual or a business?

-> Regardless of who receives the payout, you must issue a self-billed e-Invoice.

❾ Capital Reduction or Share Buybacks

Are you returning capital to shareholders or investors?
This includes:
–  Share buybacks
–  Capital reduction activities

-> These are classified as Special Payments and require a self-billed e-Invoice.

In summary