E-invoicing involves the generation of an electronic invoice by keying in relevant data ( name , address , Tax Identification number , email address , etc ) of the supplier and purchaser and submitting the invoice to the Inland Revenue Board ’ s ( IRB ’ s ) MyInvois portal for validation . There are 55 fields to be filled up , with N / A for irrelevant fields . Filling up so many fields is tedious and arduous . At least a simplification of the e-invoicing system for the initial implementation should be considered .

Once the IRB ’ s portal validates the e-invoice , the supplier will share the e-invoice with the purchaser to make the payment accordingly . The IRB is , therefore privy to the business transactions carried out . A validated e-invoice serves as proof of the supplier ’ s income and proof of expense for the purchaser . The purchaser cannot claim a tax deduction without an e-invoice .

The implementation deadline for e-invoicing is drawing nearer , mandatorily applicable for taxpayers with more than RM100 million in revenue from Aug 1 , 2024 . It is a very tight deadline , and there have been calls from various parties to perhaps start with voluntary adoption by Aug 1 , 2024 with the mandatory deadlines deferred accordingly . The implementation of e-invoicing extends to the healthcare industry as well .

To help healthcare service providers in this transition , the Inland Revenue Board has issued FAQs addressing various billing scenarios in hospitals . These FAQs cover invoicing processes for medical expenses , third party claims , consultants , rental arrangements , admission deposits and along with requirements for submitting detailed bills for validation to the IRBM .

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Malaysia has a two-tier healthcare system , which is public and private , and it is developing its medical tourism sector , too . The Malaysian healthcare industry aims to provide modern facilities at a competitive fee . Medical facilities , pharmaceutical services , diagnostic services , nursing , medications , healthcare insurance , medical equipment , online and telehealth services , and medical tourism are some of the elements of the healthcare industry . In fact , it is one of the leading countries in Asia in medical tourism . Further , Malaysia provides one of Southeast Asia ’ s strongest markets for medical device manufacturers .

During the pandemic , many shortcomings were identified in the healthcare industry . E-invoicing will help to allow for better control of the traceability of the financials for the industry .

E-invoicing in the healthcare industry comes with its own complexities and considerations compared to e-invoicing in typical businesses . Here are some of the major complications and clarifications from the IRB .

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Hospitals issue separate invoices for medical expenses , with one portion billed to insurance companies or third-party administrators ( TPAs ) and the remaining balance

billed to patients .

• Current scenario : Hospitals issue one bill for the portion covered by insurance / TPA and another bill for the remaining balance , which is to be paid by the patient directly . These bills are usually paper-based invoices sent via mail or handed directly to the patient .

• E-Invoicing implementation : One e-invoice will be issued for the portion covered by insurance / TPA , and another e-invoice will be generated for the patient ’ s remaining balance .

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Hospitals issue a proforma bill as a preliminary invoice to insurance companies , typically to request a Final Guarantee Letter ( FGL ) from an insurance company or TPA .

• Current scenario : Hospitals issue proforma bills to insurance companies to request FGLs to cover the medical expenses . Once the FGL is obtained , the hospital finalises the billing process based on the terms agreed upon with the insurer .

• E-Invoicing implementation : Once the billing arrangement is finalised , hospitals must convert these proforma bills into e-invoices .

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Consultants , doctors , and medical staff bill hospitals for their professional services rendered , typically invoicing for the total fees accumulated within a given period .

• Current scenario : Hospitals receive invoices from consultants detailing the total professional fees accrued over a month . These fees are then integrated into the invoices issued by the hospital to patients .

• E-Invoicing implementation : No change in the current invoicing process .

��N��A�� ��� �E����E

A service contract involves an agreement between a hospital and either individual doctors or a company representing doctors for the provision of medical services .

• Current scenario : Doctors bill the hospital for their professional fees , typically monthly . The hospital then issues invoices to patients , which include the consultant fees .

• E-Invoicing implementation : Individual doctors in service contracts with hospitals are responsible for issuing e-invoices directly to the hospital . If a company represents a doctor in a service contract with a hospital , that company is responsible for issuing the e-invoice to the hospital .

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Referred patients are those who are initially admitted to one healthcare facility but later transferred or referred to another facility , such as a sister company or a private hospital , for further treatment or care .

• Current scenario : Hospitals issue bills or invoices to the patient or their insurer based on the services provided during the initial admission and subsequent transfers .

• E-Invoicing implementation changes : No specific alteration to this process .

��N�����A�E� �N����E�

Consolidated invoices refer to grouping multiple transactions into a single invoice , typically

issued to simplify the billing processes or when individual invoices are not necessary .

• Current scenario : Hospitals opt to consolidate multiple transactions into a single invoice for efficiency in certain cases , like self-paying patients or transactions with minor variations .

• E-Invoicing implementation : Hospitals can generate consolidated e-invoices for the same .

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Deposits upon admission are the upfront payments hospitals collect from patients upon admission to cover anticipated medical expenses .

• Current scenario : The issuance of invoices for these deposits varies ; refundable deposits often do not require invoicing , while non-refundable deposits are documented through invoices .

• E-invoicing implementation : Hospitals must issue e-invoices for non-refundable admission deposits . Refundable deposits , however , may continue to be collected without the need for e-Invoices .

���E� ���UE�

Staff medical expenses The current practice of hospitals issuing invoices for staff medical expenses , paid by the hospital , remains the same , except that hospitals now have to issue e-invoices . Space rental An e-invoice must be issued for space rental within the hospital compound , including convenience stores and cafes . Buyer ’ s details for minors ’ medical expenses In cases where parents , guardians , or other relevant parties are responsible for paying medical expenses for minors under 18 , their details should be included as the buyer ’ s details on the e-invoice . Consultants ’ obligation and bill submission Consultants ’ requirement for e-invoice implementation is determined by their individual thresholds , irrespective of the hospital ’ s turnover . Compliance is mandated based on the issuance of invoices . Both consultants and hospitals must adhere to their respective thresholds for e-Invoice implementation . Bill validation For e-invoice submission to the IRB for validation , hospitals must provide detailed bills rather than summary bills . This ensures thorough documentation of charges incurred by patients .

The healthcare industry ’ s billing processes are complex , and ensuring regulation is essential to prevent tax evasion . The implementation of e-invoicing brings numerous benefits , including streamlined processes , enhanced transparency , and higher accuracy . – The HEALTH

�Y �A���N�A� ��N��

Harvindar Singh is a Council Member of the Chartered Tax Institute of Malaysia and Managing Partner of Harvey & Associates

“ During the pandemic , many shortcomings were identified in the healthcare industry . E-invoicing will help to allow for better control of the traceability of t�e fin�n�i�ls for the industry .”