Under Malaysia’s LHDN e-Invoicing framework, a self-billed e-Invoice is issued by the buyer, not the supplier.
This is required when the seller or payee cannot issue an e-Invoice (for example, foreign suppliers or individuals).
Below are the nine circumstances where the buyer must issue a self-billed e-Invoice:
1️⃣ Payments to Agents, Dealers, or Distributors
When you pay commissions, bonuses, or other incentives to your agents, resellers, or distributors, you must issue a self-billed e-Invoice to record their income.
Example:
A company pays monthly commissions to an independent insurance agent. The company (buyer) issues a self-billed e-Invoice to the agent.
2️⃣ Purchases from Foreign Suppliers
If you buy goods or services from foreign suppliers who are not registered in Malaysia and cannot issue local e-Invoices, you must create a self-billed e-Invoice for each transaction.
Example:
A Malaysian business pays a Singapore-based consultant — the Malaysian buyer issues a self-billed e-Invoice.
3️⃣ Profit Distribution or Dividend Payments
When a business distributes profits or dividends to shareholders, a self-billed e-Invoice is needed to document the payout for both accounting and tax reporting.
4️⃣ E-Commerce Transactions
For online marketplace or platform operators, if the sellers or merchants do not issue their own e-Invoices, the platform (acting as the buyer or facilitator) must issue a self-billed e-Invoice on their behalf.
Example:
An e-commerce platform pays out monthly earnings to its individual sellers — a consolidated self-billed e-Invoice is issued.
5️⃣ Pay-Outs to Betting and Gaming Winners
When making payments to gaming or betting winners, a self-billed e-Invoice must be created to record the payout.
Note:
Certain winnings, such as casino and gaming-machine payouts, are temporarily exempted from e-Invoicing until further notice.
6️⃣ Payments to Individuals Who Are Not in Business
If you make payments to individuals who are not conducting any business (and none of the above categories apply), you must issue a self-billed e-Invoice.
Example:
A company compensates a private individual for providing one-off photography services.
7️⃣ Interest Payments (Special Cases Only)
Interest payments usually require the buyer to issue a self-billed e-Invoice — except for these exclusions:
Interest charged by licensed financial institutions or businesses to the public.
Interest from employee to employer.
Interest paid by a foreign payer to Malaysian taxpayers.
Interest between related Malaysian companies under centralised treasury services.
Late-payment interest or penalties imposed by Malaysian taxpayers.
8️⃣ Insurance Claims or Compensation Payouts
When insurers make claim, benefit, or compensation payments to policyholders or beneficiaries, the insurer (buyer) must issue a self-billed e-Invoice for each payout.
9️⃣ Capital Reduction, Redemption, or Liquidation Payments
If a business makes payments relating to capital reduction, share or unit redemption, buybacks, return of capital, or liquidation proceeds, a self-billed e-Invoice must be issued.
The timing depends on whether there’s a written agreement:
Condition | Timing of Self-Billed E-Invoice |
With written agreement (no government approval needed) | Date of the agreement. |
With written agreement (government approval required) | Date of final approval or when all conditions are fulfilled. |
Without a written agreement | Date of transaction completion. |
Key Takeaway
Buyers are responsible for issuing self-billed e-Invoices whenever suppliers, individuals, or payees cannot issue an e-Invoice themselves.
Doing so ensures compliance, maintains accurate accounting records, and avoids issues during LHDN audits.