Introduction: A New Concept for Malaysian Businesses
As Malaysia moves toward full implementation of the e-Invoice system under LHDN, many business owners are learning new terms and processes.
One of the lesser-known but important types of invoice is the self-billed invoice, or Bil Kendiri.
This is especially relevant for businesses that work with freelancers, agents, or unregistered suppliers.
In this article, we explain what a self-billed invoice is, when it's needed, and how you can easily handle it using an e-Invoice-ready accounting system like NiagaPlus.
What is a Self-Billed Invoice (Bil Kendiri)?
A self-billed invoice is an invoice created by the buyer instead of the seller. In other words, the person or company purchasing the goods or services prepares the invoice on behalf of the provider. This situation arises when the seller is not able to issue an invoice themselves, often due to not being registered with LHDN, lacking formal business registration (e.g., no SSM), or being a non-resident (foreign provider).
This mechanism is introduced under Malaysia's e-Invoice system to ensure that all business transactions are reported to LHDN, even if the seller is not able to issue the invoice. It helps close gaps in tax reporting, increases transparency, and ensures that businesses remain tax-compliant.
The self-billed invoice mechanism was introduced by LHDN as part of Malaysia’s National e-Invoice initiative, which aims to improve tax transparency and digital reporting for all business transactions, regardless of who the seller is.
It is important to note that generating a self-billed invoice is not optional. If the seller is not able to issue one, the buyer must take the responsibility under LHDN guidelines.
This type of invoice is officially called "Bil Kendiri" in Malay and is especially common in transactions involving:
- Freelancers or gig workers
- Casual service providers (e.g., event helpers, temporary workers)
- Foreign suppliers who are not part of Malaysia’s tax system
By allowing the buyer to generate the invoice, the system ensures that the transaction is documented, taxes (if applicable) are accounted for, and the business can still claim expenses properly.
When Must You Use a Self-Billed Invoice in Malaysia?
You must issue a self-billed invoice (Bil Kendiri) when your business engages in transactions with individuals or entities who are unable to issue an e-Invoice. Once you're aware that a seller or service provider cannot issue an e-Invoice, your business is required to take action by preparing a self-billed invoice on their behalf — this is mandatory under LHDN’s guidelines.
This obligation arises not based on how big or small the payment is — but based on the seller’s eligibility to issue an e-Invoice.
Here are typical scenarios where a self-billed invoice is required:
Let me know when you're ready to paste the list of scenarios, or if you'd like help writing them.
✅ Hiring freelancers or gig workers
These are independent individuals working without formal registration under SSM or not linked to the e-Invoice system.
Example:
You hire a freelance video editor for RM800 to create a product promo. They operate under their personal name and cannot issue an e-Invoice. Your company must create and submit a self-billed invoice.
✅ Paying part-timers or casual workers
These are workers hired temporarily for specific tasks or events without a registered business entity.
Example:
Your retail store hires 3 part-time promoters for a weekend sales campaign. Each is paid RM200. Since they are not registered businesses, you must issue a self-billed invoice for each payment.
✅ Commission payouts to individuals
This includes resellers, dropshippers, or sales agents who promote or sell your products but do not run a registered business.
Example:
A part-time agent refers a customer and earns a RM150 commission. As the agent has no business registration or e-Invoice access, you need to generate a self-billed invoice when making payment.
✅ Purchasing from individuals
Sometimes you buy goods or services from individuals who aren't formal suppliers or registered business owners.
Example:
You purchase packaging boxes worth RM600 from someone selling them via social media as a side hustle. They’re not an SSM-registered business, so your company must issue a self-billed invoice for the transaction.
✅ Engaging overseas service providers
Foreign individuals or companies that aren’t registered with Malaysia's tax system cannot issue e-Invoices.
Example:
You engage a US-based freelance software developer to help build a plugin for RM1,200. As the developer has no presence in Malaysia or LHDN registration, you must issue a self-billed invoice to report the expense.
Important: The requirement applies even if the seller is not Malaysian or the transaction is irregular or one-time. As long as they cannot issue an e-Invoice, you, as the buyer, must issue a self-billed invoice.
This ensures that your expense is properly recorded and tax-deductible, while staying compliant with LHDN’s e-Invoice reporting requirements.
Quick Checklist Before Making a Payment: Are You Responsible for Issuing a Self-Billed Invoice?
Before making a payment for services or goods—especially to freelancers, temporary workers, or overseas vendors—it’s crucial to determine whether your business needs to issue a self-billed invoice.
This step is not just a formality; it plays a key role in ensuring your tax records are accurate and your business remains fully compliant with LHDN’s e-Invoice regulations.
Here’s a detailed checklist to help you make the right call before processing any payment.
1. Is the person or vendor registered with LHDN?
The first question you should always ask is whether the individual or business you’re paying is registered with Lembaga Hasil Dalam Negeri (LHDN).
In practice, this means checking if they have a valid Tax Identification Number (TIN) and are recognized as a taxpayer in Malaysia.
Why this matters:
Only taxpayers registered with LHDN can participate in the national e-Invoice system. If your vendor isn’t in the system, they can’t legally issue an e-Invoice. In such cases, the responsibility shifts to your business—you must prepare a self-billed invoice to record the transaction with LHDN.
Example: You hire a freelance graphic designer who operates informally and is not registered with LHDN. Even though the work is legitimate, the freelancer can't issue an e-Invoice—so you must handle it on your end.
2. Can they issue an official e-Invoice?
Even if someone is a known service provider or freelancer, you should confirm whether they are capable of issuing an official e-Invoice through the LHDN system.
Ask them directly or request a sample of a previous e-Invoice.
Why this matters:
Some individuals might be LHDN-registered taxpayers but have not yet integrated with the e-Invoice system. In such cases, they technically can’t issue a valid e-Invoice. This again triggers the need for your business to issue a self-billed invoice on their behalf.
Example: You engage a part-time emcee for an event. They are a registered taxpayer but have not yet set up their e-Invoice system. Since they cannot generate a valid e-Invoice, you must create and submit a self-billed invoice for the payment you make.
3. Are they operating as a formal business with SSM registration?
Always check if the individual or company you're paying is officially registered with the Companies Commission of Malaysia (SSM).
This usually means they have a business certificate and SSM registration number, which indicates they are a recognized business entity.
Why this matters:
Vendors without SSM registration are typically operating informally, such as sole proprietors, side hustlers, or one-off service providers. While they may offer legitimate services, they are not structured to issue tax-compliant invoices—leaving you, the buyer, responsible for creating a self-billed invoice.
Example: You purchase handmade signage from a local artisan who runs their business via Instagram and doesn’t have an SSM-registered business. Despite the transaction being legitimate, the vendor can't issue an official invoice. You must record it with a self-billed invoice to comply with tax rules.
Final Step: What to Do If the Answer Is “No”
So you’ve gone through the checklist—and the person you’re paying isn’t registered with LHDN, can’t issue an e-Invoice, or doesn’t run a formal business.
What happens next?
According to LHDN’s e-Invoice regulations, the responsibility now falls on you as the buyer to record the transaction properly. This means you must generate a self-billed invoice to submit the purchase to the e-Invoice system.
But why does this matter so much?
1. Ensures Your Purchase Is Officially Recognized by LHDN
In the e-Invoice era, every transaction must be recorded, even if the seller cannot issue an invoice.
Without a valid e-Invoice submitted to LHDN, the expense technically “does not exist” in the eyes of the tax authority.
By preparing a self-billed invoice, you take control of the documentation—ensuring that your purchase is logged in the official system.
This allows your company’s records to remain complete and transparent during audits or tax filing.
Example: You pay RM800 to a part-time emcee for an event. Without a self-billed invoice, this transaction won’t appear in your business tax report. If audited, you’d have no proof of the expense—despite having made the payment.
2. Protects Your Right to Claim the Expense as a Business Cost
Even if a seller can’t issue an invoice, the expense is still real—and you should be able to deduct it from your company’s taxable income.
But in order to do so, it needs to be officially documented through the e-Invoice system.
Issuing a self-billed invoice allows your business to legally claim that cost. Without it, you risk losing a valid deduction—leading to a higher tax bill than necessary.
Why it matters: A few undocumented expenses here and there can quietly add up to thousands of ringgit in lost claims over the course of a year.
3. Avoids Compliance Issues, Penalties, or Delays
Failing to issue a self-billed invoice when required is considered non-compliance with LHDN’s guidelines.
In an audit or review, this could lead to penalties, interest on unpaid taxes, or even denial of business deductions.
Taking this step isn’t just about “paperwork”—it’s about protecting your business from financial and legal risks down the road.
Think of it like this: You wouldn’t pay your staff without proper payroll records. The same logic applies to informal suppliers or freelancers—without the right documents, you expose your business to unnecessary risk.
What Should a Self-Billed Invoice Include?
Now that you understand when a self-billed invoice is required and why it matters, the next critical step is knowing how to prepare it correctly.
Under Malaysia’s National e-Invoice system regulated by LHDN, self-billed invoices—just like regular e-Invoices—must follow a standard format to be considered valid.
This isn’t just for neat recordkeeping—it’s to ensure accurate tax reporting and compliance with digital invoicing requirements.
If you’re creating a self-billed invoice, here’s what must be included:
1. Buyer’s Details (You or Your Business)
Since you’re the one issuing the invoice, your company becomes the “buyer” in the transaction. The invoice must clearly show:
• Business or individual name
• LHDN Tax Identification Number (TIN)
• Business registration number (SSM)
• Full address and contact details
Including these details ensures that the invoice is properly associated with your business in the MyInvois system, and it allows you to claim the expense in your accounting records.
💡 Tip: If you're using software like NiagaPlus, your business information will be auto-filled every time you generate a self-billed invoice—reducing errors and saving time.
2. Seller’s Information (The Person You’re Paying)
This is where many businesses get confused. Even if the person you're paying isn't a formal business or isn’t LHDN-registered, you’re still required to provide as much identifying information as possible.
You should include:
• Full name of the seller
• Personal ID number – usually MyKad (for Malaysians) or passport number (for foreigners)
• Contact details, such as email or phone number
This allows LHDN to trace the transaction, especially in cases involving freelancers, gig workers, or foreign service providers.
🚨 Important: Not including the seller’s details—or using fake names—can lead to rejection of the invoice or non-compliance issues during audit.
3. Transaction Date
This refers to the date the goods or services were delivered or completed, not necessarily the date you created the invoice.
This is important for accurate tax period reporting and helps LHDN determine whether the expense falls into the correct fiscal quarter or year.
4. Description of Goods or Services
This section should be clear and specific.
Instead of writing something vague like “freelance service,” you might write:
• “Photography service for corporate event, 3 hours, includes editing”
• “One-time website landing page design with 2 revisions”
• “Manual labor support for product launch event, 4 hours”
This makes your expense verifiable and justified in the eyes of tax authorities and helps your internal team understand exactly what the payment was for.
5. Amount and Tax Details (If Applicable)
List the full payment amount, and indicate if any Service Tax (SST) or Withholding Tax applies.
For most freelancers and unregistered individuals, no tax is charged—but the invoice should still clearly state:
• Subtotal (before tax)
• Tax amount (0%, 6%, or other, if applicable)
• Total amount paid
💡 If you're importing services or paying a non-resident, there may be a withholding tax obligation under LHDN rules. In such cases, consult your tax advisor or accountant to include the correct tax amount.
6. e-Invoice Validation Process
Once the invoice is complete, you must validate it with LHDN either by:
• Submitting it manually through the MyInvois Portal – (suitable for smaller businesses or low-volume users)
• Sending it automatically through an API or accounting software
– (like NiagaPlus, which connects directly to LHDN for seamless submission)
🧠 Why this matters: Until it’s validated by LHDN, your self-billed invoice isn’t officially accepted.
Validation assigns a unique Invoice Number and QR code, proving that it has been successfully registered in the national e-Invoice system.
Tip: Save a Copy for Internal Records
Although LHDN stores a digital record, it’s best practice to download and save a copy of the validated invoice in your own system.
This protects you during future audits, or if you need to show proof of payment or business expense claims.
| Item | ✅ Required? |
|---|---|
|
Buyer’s full details |
Yes |
|
Seller’s name and ID |
Yes |
|
Transaction date |
Yes |
|
Description of service/goods |
Yes |
|
Payment amount & tax info |
Yes |
|
Validation through MyInvois/API |
Yes |
|
Saved copy for records |
Highly Recommended |
Who Is Responsible for Reporting to LHDN?
As we’ve touched on earlier, in the case of a self-billed invoice, the buyer—not the seller—is fully responsible for ensuring the transaction is reported to LHDN.
Now let’s break down exactly what that responsibility entails, and why it matters.
When you’re dealing with a seller who cannot issue a proper e-Invoice—such as a freelancer, an unregistered individual, or a foreign service provider—it becomes your obligation to take over the invoicing process.
Here’s what the buyer (you or your business) must do:
1. Prepare the Self-Billed Invoice
You must create an invoice that includes all the required details we discussed earlier—buyer and seller information, transaction date, service description, amount, and applicable tax information.
This ensures the transaction is documented in a format recognized by LHDN.
2. Submit It to LHDN
The invoice must be submitted through the MyInvois Portal or via a registered API integration.
This step is non-negotiable: an invoice that isn’t validated by LHDN isn’t considered official or legally usable in your accounting records.
💡 Reminder: Even if the seller is not aware of this process, it doesn’t remove your responsibility as the buyer. It’s your business that benefits from the deduction or expense claim—so the burden of compliance falls on you.
3. Keep a Copy for Audit and Recordkeeping
After the invoice is validated, always download and save a copy.
In the event of a future audit, this document will serve as proof that you followed the correct process and reported the transaction to LHDN.
What About the Seller?
The seller—whether it’s a gig worker, part-time helper, or overseas freelancer—is not required to take any action.
They do not need to register with LHDN, and they do not need to submit anything on their end.
The system is designed this way intentionally: to reduce friction for small, informal sellers, while ensuring buyers still maintain proper compliance and transparency in their business transactions.
How NiagaPlus Helps You Create Self-Billed Invoices Effortlessly
Creating a self-billed invoice manually can be a daunting task—especially if you're not familiar with LHDN’s specific requirements.
A single mistake in the format, tax number, or submission process can result in non-compliance, audit risks, or rejected claims.
That’s where NiagaPlus comes in.
As a fully e-Invoice-ready accounting software built for Malaysian SMEs, NiagaPlus simplifies the entire self-billed invoice process—from generating the document in the correct format, to submitting it directly to LHDN via system integration, and finally, storing everything neatly in one place for future reference or audit.
Built-In Self-Billed Invoice Generator — No Guesswork Required
With NiagaPlus, you no longer need to manually figure out what fields to fill or worry about formatting.
When you create a new self-billed invoice in the system, you’re guided step-by-step with intelligent field selections based on your chosen self-billed type:
• Local Individual / Commission: You’ll be prompted to select the Identification Type (e.g., MyKad, MyTentera) and a pre-filled Tax Identification Number (TIN) based on local regulations.
• Foreign Supplier (Goods or Services): The system will switch the fields to show business name, Business Registration No. (automatically set to N/A) and a different format for TIN, tailored for international compliance.
This dynamic field adaptation ensures that you always input the correct format required by LHDN — no more second-guessing.
Add Full Transaction Details with Ease
Need to describe what the transaction is about? NiagaPlus gives you a dedicated ledger entry field, where you can write detailed notes like:
“Photography service for corporate event, 3 hours, includes editing.”
You can also:
• Select the appropriate ledger account, e.g., “Advertising & Promotion”
• Specify payment source (Bank, Cash, etc.)
• Attach supporting documents for your records
All of this makes your invoice more transparent, traceable, and audit-ready.
Real-Time e-Invoice Status & Validation Feedback
Once submitted, your self-billed invoice is sent directly to LHDN via our MyInvois integration.You don’t have to log in to multiple systems.Plus, the Self Billed dashboard gives you full visibility over:
• Invoice submission status (Success/Fail)
• Invoice type (Local/Foreign)
• Submission user and date
Instantly View the Official LHDN-Approved e-Invoice
Once your self-billed invoice is successfully submitted, NiagaPlus lets you preview the actual e-Invoice exactly how it’s issued by LHDN — with just one click on the 👁️ eye icon in the Self Billed dashboard.
Here’s what you’ll see in the e-Invoice preview screen:
1. Official Invoice Number
A unique identifier generated by LHDN (e.g., INV00000000123) to track your e-Invoice submission.
2. Digital Signature & QR Code
These ensure the authenticity and integrity of the invoice. The QR code can be scanned by auditors or suppliers to verify the invoice via LHDN’s portal.
3. Submission Status
Clearly shows whether the invoice is "Success", along with the date and time it was processed.
4. LHDN Verification Link
A clickable link is provided that opens the invoice directly on the MyInvois Portal. This acts as real-time proof that your invoice is:
- Officially recognized by LHDN
- Tamper-proof
- Ready for compliance checks
5. Buyer & Seller Details
Shows all the fields submitted — such as your business registration, the supplier’s info (e.g., TIN or MyKad), and the full breakdown of charges.
6. Itemized Transaction Info
Includes descriptions, quantities, pricing, ledger classifications, and total amounts including tax (if applicable).
This preview helps you double-check all details before sharing the invoice with your supplier or keeping it for your audit files.
FAQs About Self-Billed Invoices (Bil Kendiri)
Here are the most common questions about self-billed invoices under Malaysia's e-Invoicing system — especially for businesses, freelancers, and SMEs getting ready for LHDN’s e-Invoice compliance.
No, you cannot issue a self-billed invoice yourself.
In the case of self-billed invoices, it is the buyer (your client or customer) who must generate the invoice on your behalf, especially if you don’t have a business registration or Tax Identification Number (TIN).
It depends on the type of goods or services provided.
The buyer is responsible for determining whether SST applies to the transaction when generating the self-billed invoice.
If applicable, the tax must be reflected in the invoice.
You can still issue a self-billed invoice by using the seller’s:
• MyKad number (for local individuals)
• Passport number (for foreign individuals)
These are valid identification numbers accepted by LHDN for self-billed invoice submissions.
It is recommended, but not mandatory.
While LHDN does not require consent, it’s best practice to inform the seller (freelancer or individual) that a self-billed e-Invoice has been submitted on their behalf.
Self-billed invoices must be issued at the time of transaction or within the allowable time frame set by LHDN (usually within 30 days).
This ensures timely validation and tax compliance.
Yes. Both the buyer and seller must keep a copy of the validated self-billed e-Invoice for audit and tax purposes, as required under Malaysia’s Income Tax Act.
– Select “Self-Billed Invoice”
– Enter seller details (MyKad/Business Name)
– Add the service description
– Submit directly to LHDN via MyInvois API
You’ll also get a digital invoice with a QR code and validation status.
– Mark the invoice as “Fail”
– Display the status and timestamp
– Allow you to fix and resubmit instantly
With real-time status tracking in NiagaPlus, you’ll know exactly when it’s successful.
Conclusion: Stay Ahead with the Right Tools
As Malaysia moves closer to mandatory e-Invoicing, understanding special formats like self-billed invoices is essential.
If your business regularly works with freelancers, agents, or unregistered individuals, you're likely responsible for issuing self-billed invoices. Failure to comply may result in audit complications or tax penalties.
But the process doesn’t have to be complicated.
With NiagaPlus, you can:
– Easily create and submit self-billed invoices using MyKad or passport info
– Track real-time validation status from LHDN
– Store, retrieve, and resend invoices anytime — without manual paperwork
Ready to Automate Your e-Invoice Process — Including self-billed invoices?
Don't wait until compliance becomes a headache.
NiagaPlus is your all-in-one platform to simplify e-Invoicing for every transaction type — from regular sales to self-billed invoices.
👉 Fill in the form below to get a free walkthrough or demo — and let our team help you stay 100% compliant with LHDN’s MyInvois requirements.
