In many business models, Agents, Dealers, and Distributors (ADD) play a key role in closing sales. After e-Invoice implementation, when making payments to ADD, businesses are required to issue a self-billed e-Invoice if the ADD does not provide an e-Invoice themselves.
Currently, businesses typically:
- Transfer commissions/incentives to ADD after obtaining their NRIC copy
- Require ADD to sign payment vouchers for record-keeping
- Issue CP58 at the end of the year (if commissions exceed RM5,000 per annum)
However, in the e-Invoice era, businesses must now also issue a self-billed e-Invoice by inputting the ADD’s information into MyInvois.
Understanding Self-Billed E-Invoices for ADD Payments
What is a self-billed e-Invoice?
In simple terms, a self-billed e-Invoice is an invoice that you issue on behalf of your ADD when making commission/incentive payments, as long as they do not issue an e-Invoice to you.
Accrual vs Paid Basis
Self-billed e-Invoices can be issued on an accrual basis (when commission is earned) or on a paid basis (when commission is paid out). The timing must be consistent with commission statements and payment records.
Mandatory Information to Obtain from ADD
To issue a self-billed e-Invoice smoothly, businesses must collect the following mandatory details from ADD:
- Name
- NRIC / BRN (Business Registration Number)
- Address
- Contact Number
- TIN (Tax Identification Number)
💡 If the ADD does not provide their TIN, you can search for it via MyInvois (refer to our previous post on Search TIN for E-Invoice).
Step-by-Step Guide: Issuing a Self-Billed E-Invoice in MyInvois
2. Start a New Self-Billed Invoice
- Click “New Documents”
- Select “Self-Billed Invoice”
3. Modify E-Invoice Code (Optional)
- If needed, you can change the e-Invoice code to match your internal documentation.
4. Enter ADD (Supplier) Information
💡 Unlike a normal e-Invoice, you need to fill in the ADD’s information on the left-hand side.
- Enter the ADD’s NRIC/BRN and other required details
- Click “Validate”
5. Search for TIN (If Not Provided by ADD)
- If your ADD has not provided their TIN, search for it using their NRIC or BRN in MyInvois.
6. Fill in ADD Details
- Name
- SST No. → Enter “NA” if not applicable
- MSIC Code → Enter “00000” if not applicable
- Tourism Tax Registration No. → Enter “NA” if not applicable
- Email, Contact Number & Address
7. Add Line Items (Commission/Incentive Payment Details)
- Click “+ Add Line”
- Under Classification Code, select “037” (Self-billed – Monetary payment to agents, dealers or distributors)
- Under Description, enter detailed information about the commission, including:
- Commission type
- Transaction details
- Period covered
- Under Description, enter detailed information about the commission, including:
💡 Providing clear details helps in audits and makes it easier to trace commission records.
- Choose the appropriate tax type
- Press “+ Add”
8. Add Additional Information (If Needed)
- Enter any additional details related to the transaction.
9. Review & Submit the Self-Billed E-Invoice
- Verify all details carefully.
- Click “Sign & Submit Document”.
10. Finalize Submission & Print the Invoice
- Click “Submit”
- Click on the generated e-Invoice code
- You will be redirected to the self-billed e-Invoice page
- Click “Print”
✅ Share the self-billed e-Invoice with your ADD as proof of payment.
Final Thoughts – Self-Billed E-Invoice Compliance
- Mandatory for all commission/incentive payments – Whether the payment is monetary or non-monetary, a self-billed e-Invoice must be issued.
- Workload Increase for Businesses – Businesses must now issue self-billed e-Invoices individually for every commission payment, regardless of amount.
- Handling ADD Information Carefully – Some agents or individuals may hesitate to provide personal details (NRIC, address, etc.). Businesses must plan how to collect and handle this sensitive information.
- LHDN Can Easily Trace Underreported Income – ADD or individuals who forget to report commission payments as income will be easily tracked by LHDN, and penalties may apply.