Simplified Guide to E-Invoicing for Insurance Companies

The Inland Revenue Board of Malaysia (LHDN) has released an inclusive document made for the e-invoicing in insurance sector. This document, in the form of an FAQ answers common concerns regarding general topics such as consolidated e-invoices, annual premium statements, handling policyholder requests. It also includes underwriting and subscriptions, claims and benefits payment, payments to agents, dealers, distributors and inter-fund charges.

A. General

Issuing of Consolidated E-Invoices for Certain Transactions:

Insurance companies can grant consolidated e-invoices for revenue from policyholders who do not require individual e-invoices.This method simplifies reporting and ensures compliance

The consolidated e-invoices must be in compliance with the rules mentioned in section 3.6 of the e-invoice specific guideline released by IRBM.

Role of Annual Premium Statements for Consolidated E-Invoices:

Annual premium statements can be used for consolidated e-invoices if the policy holder does not request e-invoices, Insuch a case, they must continue to issue regular statements or bills as per current practices.

Accumulated submission:

Aggregate data from these statements or bills to create a consolidated e-invoice. Submit the consolidated e-invoice to the IRBM within seven calendar days after the month-end. Detailed guidance is provided in Section 4.3 of the e-Invoice Specific Guideline.

Full-Year Premium Data Transmission If the first annual premium statement (for January to December 2024) is only available in February or March 2025, companies can:

Include the entire year’s data (January to December 2024) in the February/March 2025 submission.

There is no requirement to separate data for the period from January to July 2024, although mandatory e-invoicing begins on August 1, 2024.

Dealing with ad-hoc requests for valid e-invoices:

When e-invoices usually follow the consistent issuance cycle, the insurance company must consider policyholder requests outside this cycle:

Simple procedure: Establish a direct process to deal with such requests.

Effective communication: Notify customers on how to request consolidated e-invoices during regular invoice cycles to evadepostponements or misunderstanding.

Issuing E-Invoices for Products that do not have a tax-respite:

Policyholders may ask for consolidated e-invoices for products are not in tax relief category. In sucha scenario:

For e-invoicing purposes, the policyholder is assumed to be the buyer.

Insurance companies are obliged to grant a consolidated e-invoice on request, despite the product’s tax relief status.

B. Underwriting and subscription
 

C. Claims and Benefit Payments
 

D. Other Considerations