The Ultimate Guide to E-Invoicing for Airline Operators

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The Inland Revenue Board of Malaysia (LHDN) has released a comprehensive FAQ tailored for the aviation sector. This FAQ aims to provide clear guidance and address various business scenarios, offering practical advice to help aviation-related businesses in Malaysia comply with regulatory requirements effectively.

1. E-Invoices for Flight Tickets and Private Air Charters

E-invoicing is mandatory for the sale of flight tickets and private air charter services, with distinct requirements based on the type of airline operator:

  • Local Airline Operators: Must issue e-invoices for all flight tickets and services, regardless of the point of sale.
  • Foreign Airline Operators: Required to issue e-invoices only for transactions where the point of sale is in Malaysia, as determined by the International Air Transport Association (IATA).

Important: Consolidated e-invoices are not allowed for these transactions. For further guidance, refer to Sections 2.3, 2.4, and 3.7 of the e-Invoice Guideline.

2. Buyer Information in E-Invoices

Details about the buyer vary depending on the purchase context:

  • For Personal Travel:The buyer’s details should reflect the person who made the purchase.
  • For Group Bookings:Airlines may choose between two approaches:
    • Use the details of the individual making the purchase for all invoices.
    • Use each passenger's details for their respective invoices.
3. Addressing Privacy Concerns with Buyer Data

Given global data protection laws, such as GDPR, airlines may face difficulties collecting personal details like Tax Identification Numbers (TIN). To address this, the Inland Revenue Board of Malaysia (IRBM) allows temporary alternatives:

  • Buyer’s Name: Use "General Public."
  • TIN: Input "EI00000000020."
  • Business Registration Number (BRN): Use "NA."
  • Other Details (Address, Contact Number, SST Registration Number): Use "NA."

This concession ensures compliance while respecting data privacy laws.

4. E-Invoices for Excess Baggage Fees

For fees charged for excess baggage during check-in:

  • If Requested: Issue an e-invoice immediately.
  • If Not Requested: Provide a receipt and consolidate these transactions into an e-invoice within seven days after the end of the month.
5. Managing Price Adjustments and Refunds

Changes in ticket prices require specific e-invoicing treatments:

  • Price Increases: Issue a separate e-invoice or debit note for the difference.
  • Price Reductions or Refunds: Issue a credit note or refund note.
  • No Monetary Changes: If there’s no change in monetary value, no additional e-invoice is required.
6. E-Invoices for Ancillary Services
Flight-Related Ancillaries (e.g., seat selection, baggage):
  • When sold with a flight ticket in a single transaction, airlines can either:
    • Issue a single e-invoice covering both services.
    • Issue separate e-invoices for the flight ticket and ancillaries.
  • When sold separately:
    • An e-invoice is mandatory for the flight ticket.
    • An e-invoice or receipt is required for ancillary services, depending on the buyer’s request.
Non-Flight Ancillaries (e.g., travel insurance, car rentals):
  • If the airline acts as the principal:
    • The airline must issue the e-invoice.
  • If acting as an agent:
    • The service provider is responsible for issuing the e-invoice or receipt.
Key Takeaways

Airline operators must navigate detailed e-invoicing rules to ensure compliance with the Income Tax (Issuance of Electronic Invoice) Rules 2024. By understanding these requirements for tickets, charters, and ancillary services, airlines can transition smoothly to e-invoicing while avoiding regulatory issues.