Is e-invoicing applicable to non-business, non-profit, co-operatives or charitable organisations with annual donations or contributions of more than RM 150,000/-? I have received complaints from these organisations who are registered under the Registrar of Societies or Cooperatives Societies Commission that they have been informed by the Inland Revenue Board Malaysia(LHDN) that they are required to comply with the requirements of e-invoicing.
The implementation of e-invoicing is mandatory under Section 82C of the Income Tax Act, 1967 for businesses with annual turnover or revenue of more than RM150,000/-. Appeals are currently being made by the public to increase the threshold to annual sales of RM500,000 to align with the requirement to pay Sales and Services Tax.
Section 120(1)(d) provides for a fine of not less than RM200 and not more than RM20,000 or imprisonment not exceeding 6 months or both, if a person fails to issue an e-invoice, a self-billed invoice or a consolidated transaction invoice. This increases both pressure and financial burden for these organisations to comply.
Apparently LHDN is requiring compliance due to the guideline that “However a charitable organisation’s annual revenue(in this case donations received) is less than RM 150,000, it is not required to issue e-invoice.”
I will be seeking clarification from both LHDN and the relevant agencies on the rationale of requiring charitable organisations to comply with e-invoicing when they are exempted from paying tax and are not taxpayers in the normal definition.
LIM GUAN ENG
