Main Transaction Types Under Malaysia’s e-Invoicing Framework: B2B, B2C, B2G

The IRBM standards mandate electronic invoices for income recognition in all transactions. Recipients must obtain e-invoices for expenditures, including returns. Three main transaction types include B2B, B2C, and B2G transactions.

The IRBM standards require the issuance of electronic invoices:

Evidence of income

In order to recognize sales income, an electronic invoice must be sent whenever the supplier provides the recipient with goods or services. Additionally, it must be given in "other transactions" where the taxpayer makes money.

Evidence of spending

The recipient must ensure that they receive the e-invoice from the provider whenever the taxpayer purchases goods or services or incurs any other expenses. It also covers situations where products are returned or discounts are offered. Additionally, the recipient would need to submit a self-invoice to record the costs if the transactions were between a foreign seller and a Malaysian recipient.

These three are now the main transaction types covered by invoicing, according to the e-Invoicing rules published by LHDN (Lembaga Hasil Dalam Negeri), Malaysia.

B2B (Business-to-Business) Transactions

Business-to-business (B2B) transactions occur when two companies trade goods or services. Manufacturers, wholesalers, retailers, and service providers are the parties involved in these transactions.

Business-to-Consumer (B2C) Transactions

Direct sales of products or services from a company to customers are known as business-to-consumer (B2C) transactions. These transactions are frequently observed in retail settings, internet marketplaces, and service sectors.

Business-to-Government (B2G) Transactions

Businesses that supply goods or services to governmental organizations or agencies engage in business-to-business (B2G) interactions.