Choose Accredited PEPPOL Service Provider for Malaysia E-Invoicing Compliance

Soon, e-invoicing will become a crucial aspect of all business operations. In Malaysia, the government has adopted the PEPPOL (Pan-European Public Procurement Online) standard for e-invoicing, which ensures interoperability and seamless communication between businesses and government entities.

To facilitate the implementation of PEPPOL e-invoicing, the government has established an accreditation system for Peppol Service Providers (also known as Peppol Access Points (APs)).

These APs are responsible for creating and maintaining the connectivity gateways that function as access nodes on the e-invoicing network, compliant to the PEPPOL standards, routing of e-invoices to the correct destination APs, as well as for registering and updating participant details in the Malaysia SMP.

Importance of choosing an accredited PEPPOL Service Provider for Malaysia E-Invoicing

When selecting an e-invoicing solution for your SME, it is crucial to opt for a government-accredited PEPPOL SP. Here’s why:

1. Compliance: Accredited SPs offer e-invoicing solutions that fully comply with the PEPPOL standard, and all legal and regulatory requirements set by the Malaysian government. By choosing an accredited SP, you can rest assured that your business will avoid any legal issues or penalties related to non-compliance.
2. Reliability: Accredited SPs have undergone rigorous testing and evaluation to ensure that their systems are secure, robust, and reliable. Opting for an accredited SP means you can trust that your e-invoicing processes will run smoothly and efficiently, minimizing any potential disruptions to your business operations.
3. Interoperability: PEPPOL-accredited e-invoicing systems are designed to be interoperable, enabling seamless data exchange and communication between your business and other entities, including government bodies. This interoperability is key to streamlining your processes, reducing errors, and saving time and resources.
4. Ongoing Support and Updates: Accredited SPs are obligated to provide continuous support and updates to their e-invoicing systems, ensuring that they remain compliant with the latest PEPPOL standards and government regulations. This ongoing support is essential for your business to stay up-to-date and avoid any disruptions to your e-invoicing processes.

But why? What’s the difference? Do refer to below Accreditation Eligibility, and also its Accreditation Process to understand more.

But first, the list of PEPPOL Service Providers that currently in the accreditation process.

List of PEPPOL Service Providers (SP)

As of the published list of PEPPOL Service Providers updated 1st November 2024 by MDEC (Malaysia Digital Economy Corporation).

There are currently 117 providers already submitted their application, with 50 of them already being Accredited while 67 of them still at “Undergoing Accreditation” status.

A few of the accounting software from our previous Top Accounting Software in Malaysia that support e-Invoicing in 2024 article already is on the list.

• AUTOCOUNT – In Progress
• SQL – Accredited
• QNE – In Progress
• BUKKU – In Progress
• XERO (Under tickstar.com) – Accredited

Accreditation Eligibility Criteria for PEPPOL Service Providers

The accreditation eligibility criteria for PEPPOL Service Providers (SP) in Malaysia are comprehensive and crucial for ensuring the reliability and compliance of e-invoicing solutions. It’s essential to understand and communicate these criteria to SMEs seeking suitable e-invoicing solutions. Here’s a breakdown of the accreditation eligibility criteria and its significance for SMEs:

1. Company Registration Requirements:
   • Locally Incorporated Company, majority Malaysian-Owned: The company must be incorporated in Malaysia under the Companies Act 1965 or Companies Act 2016, with a minimum paid-up capital of at least RM50,000. Additionally, a minimum of 51% equity must be held by Malaysians as per the shareholding structure in the SSM.
   • Locally Incorporated Company, majority foreign-owned: Similar to the above, the company must be incorporated in Malaysia with a higher minimum paid-up capital, reflecting the involvement of foreign ownership.
   • Foreign-based Company: The company must be a registered business with a minimum paid-up capital, mirroring the requirements for locally incorporated companies.
   Significance for SMEs: Understanding these registration requirements is vital for SMEs to ensure that the e-invoicing solutions they choose are offered by SPs that meet the necessary legal and financial criteria, providing assurance of their stability and accountability.
2. Operational Experience and Legal Standing:
   • The company must be in operation for at least one year as of the date of submission, demonstrating its operational stability and experience.
   • The management of the company must declare that the company is not subject to liquidation, winding up, dissolution orders, or any legal proceedings for criminal offenses.
   Significance for SMEs: SMEs can benefit from e-invoicing solutions provided by SPs with a proven track record and legal standing, minimizing the risk of disruptions or legal complications in their invoicing processes.
3. Membership and Compliance Requirements:
   • Membership of OpenPeppol AISBL and compliance with Malaysia Peppol Authority Specifications are essential for ensuring adherence to international standards and interoperability.
   Significance for SMEs: SMEs can leverage e-invoicing solutions from SPs that are aligned with international standards, facilitating seamless exchange of e-invoices with partners and clients.
4. Information Security and Tax Authority Compliance:
   • SPs must comply with stringent information security requirements, including multifactor authentication, encryption at rest and in transit, regular security monitoring, and optional certification of ISO/IEC 27001. Additionally, compliance with Malaysia Tax Authority requirements is mandatory.
   Significance for SMEs: By choosing e-invoicing solutions from SPs that meet these security and tax compliance requirements, SMEs can ensure the protection of their sensitive financial data and adherence to tax regulations.

Accreditation process for Peppol Service Providers (SPs) in Malaysia

Based on the Guidelines on Accreditation of Peppol Service Providers SP PDF provided by MDEC, the accreditation process for PEPPOL Service Providers (SPs) in Malaysia can be summarized as follows:

1. Submit interest to the Peppol Authority (PA) and acquire the SP Accreditation Application Form.
2. Submit the completed Accreditation Application Form and required documents to the PA.
3. The PA conducts a due diligence assessment of the application and notifies the company if additional documents are needed or if the application has fulfilled all requirements.
4. The company must become an OpenPeppol AISBL member (if not already a member) by submitting a registration form to OpenPeppol and sending a copy of the successful application notification to the PA.
5. Request a Public Key Infrastructure (PKI) test certificate from OpenPeppol through the Peppol Service Desk.
6. Complete OpenPeppol’s onboarding test by executing a self-testing process to verify the ability to send and receive valid e-invoices in compliance with Malaysia Peppol Specifications (MY-PINT).
7. Complete interoperability testing in the test environment by requesting a Malaysia SMP sandbox account and performing tests with OpenPeppol’s testbed.
8. Sign the Peppol Service Provider Agreement with the PA.
9. Request and obtain a PKI production certificate through the Peppol Service Desk, attaching the test report from the testbed for review and approval by OpenPeppol and the PA.
10. Obtain confirmation of accreditation from the PA, which is valid for 12 months. The accredited SP will be listed on various communication channels.
11. Renew the accreditation by applying to the PA within 3 months before the expiry date of the current accreditation status.

From the eligibility criteria and guidelines, we can see that it is a very rigorous accreditation process. PEPPOL SPs have to demonstrate their commitment to providing high-quality, reliable, and compliant e-invoicing services to SMEs. The accreditation serves as a seal of trust, giving SMEs the confidence that they are partnering with a service provider that has been thoroughly vetted and approved by the government.

Moreover, the ongoing compliance monitoring ensures that accredited SPs maintain their high standards over time, providing SMEs with the assurance of long-term service quality and reliability. This is particularly important for SMEs, as they can focus on their core business operations without worrying about the integrity and compliance of their e-invoicing processes.

Summary

In summary, when selecting an e-invoicing solution in Malaysia, SMEs should prioritize government-accredited PEPPOL Service Providers to ensure compliance, reliability, interoperability, and ongoing support. The accreditation process serves as a seal of trust, giving SMEs peace of mind in their e-invoicing implementation.

For more information on PEPPOL Service Providers and the accreditation system in Malaysia, visit the official website at SP – National E-Invoicing | MDEC

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