The transition to electronic invoicing (e-invoice) is a significant step for the telecommunication industry in Malaysia.
These FAQs serve as a comprehensive guide to address common queries related to the implementation of e-invoicing within the sector. It delves into specific situations such as billing adjustments, sales of prepaid plans, rental of premises, and the provision of add-on services, offering clear guidance on the e-invoice treatment for each. Additionally, it outlines the obligations of various stakeholders in the process of issuing e-invoices. Below, we explore each of these topics in detail, providing examples to illustrate the practical application of e-invoice procedures.
Billing Adjustments
When billing errors occur, adjustments need to be made. The question arises on how to handle these adjustments in the e-invoice system. For example, if a customer is overcharged due to a system error, the telecom company must issue a credit note to rectify the mistake. This credit note should be reflected in the e-invoice system, ensuring that the customer’s account is accurately updated. According to the FAQs, a telecommunication service provider is allowed to make adjustments by reflecting the adjustment in the next cycle bill/statement, in line with their current business practices.
Example 1: If a customer is overcharged by RM10 due to a system error, the telecom company has the flexibility to either issue a credit note e-invoice to correct the mistake or reflect a RM10 deduction in the customer’s next billing cycle. This ensures that the customer’s account is accurately updated while maintaining consistency with the company’s existing billing procedures. Example 2: If there is excess charging discovered in the August billing cycle, telcos can provide rebates or fee reductions in September bills to impacted customers instead of issuing separate credit notes.
Prepaid Plan Sales
The sale of prepaid plans is common in the telecom industry. A frequently asked question is how these transactions are recorded. For instance, when a customer purchases a prepaid SIM card, the telecom provider must generate an e-invoice at the point of sale, detailing the cost and any applicable taxes. This e-invoice serves as proof of purchase and is important for both accounting purposes and customer records. Example: When a telco sells 500 prepaid SIM cards to a retail store for resale, the existing method of billing the retailer entity for inventory intake can continue with the migration to e-invoicing.
Rental of Premises
Telecom companies often rent out spaces for various purposes, such as installing towers or equipment. The e-invoice treatment for rental agreements is a topic of interest. As an example, if a telecom company rents a space on a building’s rooftop for a cell tower, the e-invoice should clearly state the rental period, the amount due, and any other relevant terms of the agreement. Example 2: For storefront or land rent paid to private owners not having formal company registration, telcos have to generate self-billed invoices documenting the property or ground lease payments.
Add-on Services
Customers may opt for additional services beyond their basic telecom plans, such as international calling packages or data boosts. The question here is how to document these add-on services in the e-invoice. Example: If a separate video-on-demand service is subscribed by customers as an add-on and billing flows via the telco monthly statement, then the video streaming service provider itself has to issue the invoice to end-consumer not the telecommunication operator.
However, if the streaming company is a foreign entity not under local e-invoicing mandate, then consumer has to self-bill and generate invoice taking supplier role.
Additionally, for any other commission or platform fees earned by the telco in the process, they need to issue invoices basis contractual splits with video service company towards their margin share capture.
So in summary:
- Local video company: Issues e-invoice
- Foreign video firm: Customer self-bills
- Telco platform fees: Telco to issue e-invoices to the video provider
Essentially, billing has to follow underlying flow of economic benefits across entities while meeting compliance needs.
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