What is PEPPOL?

What is PEPPOL and How Does it Fit into Malaysia’s E-Invoicing Framework?

A Brief History of PEPPOL

PEPPOL started in Europe in 2008, supported by the European Commission. It was created to simplify cross-border trade within Europe, making it easier for companies in one country to do business with governments and companies in another.

Over time, PEPPOL expanded beyond Europe. Countries like Singapore, Australia, and New Zealand adopted it as a standard for business-to-government (B2G) and business-to-business (B2B) transactions.

Is PEPPOL Required for e-Invoicing Compliance in Malaysia?

No, PEPPOL is not mandatory for e-Invoicing compliance in Malaysia.

In Malaysia Lembaga Hasil Dalam Negeri (LHDN) has introduced its own e-Invoicing system to standardize how businesses issue invoices and report them to the tax authority in real-time. Businesses must comply with LHDN’s requirements, which involve:

• Issuing e-Invoices in a structured digital format (XML or JSON),
• Submitting them through LHDN’s MyInvois portal or via API integration, and
• Ensuring each invoice has a UUID and QR code once validated.

None of these steps require PEPPOL.

However, cloud solutions like Bukku are developing Peppol functionality to support the Malaysian government’s aspirations to transform Malaysia into a digitally-enabled and technology driven high income nation. See Malaysia Digital Economy Blueprint

Then Why is PEPPOL Being Mentioned in Malaysia?

Good question! Although PEPPOL is not part of LHDN’s e-Invoicing requirements, the Malaysia Digital Economy Corporation (MDEC) has taken the initiative to introduce PEPPOL to Malaysian businesses under the National e-Invoicing Initiative to improve business efficiency and productivity.

Here’s why:

1. Global Trade Readiness
   PEPPOL allows Malaysian businesses to transact internationally with foreign governments and companies that already use PEPPOL. For exporters and multinational companies, this opens up easier access to cross-border trade.
2. Digital Efficiency
   PEPPOL automates document exchange, reducing manual entry, processing errors, and delays. It fits into the larger vision of digitalising Malaysia’s economy, especially for supply chain and procurement activities.
3. Public Sector Digitisation
   PEPPOL could eventually be used in government procurement (G2B) in Malaysia, where suppliers send invoices to ministries or government departments digitally and in a standard format.
4. Private Sector Adoption
   Large corporations with many suppliers might also adopt PEPPOL internally to streamline their invoicing workflows. This is especially useful when dealing with hundreds or thousands of vendors.

So What Should Malaysian SMEs Do?

If you’re a small or medium-sized business in Malaysia, your immediate concern should be complying with LHDN’s e-Invoicing guidelines. PEPPOL is optional, and may only be relevant to you if:

• You export to countries where PEPPOL is used,
• You do business with government bodies adopting PEPPOL,
• Or you are part of a supply chain where the main buyer mandates PEPPOL invoicing.

In most cases, especially for local transactions, you do not need PEPPOL to comply with LHDN’s e-Invoicing system.

Final Thoughts

To sum it up:

At Adventus Business Consult, we help you focus on what matters most for your business. We assist with LHDN e-Invoicing setup, system configuration, and user training, so you stay compliant without confusion. If PEPPOL becomes relevant to your business later on, we can guide you on that too.