The E-Invoice Challenge! Is Self-Billed Really the Answer? Uncover the Truth Now! 💡📑
Malaysia’s e-invoice system is on the way, and many importers are asking: Do I need a K1 form to comply?
The answer depends on how you manage your imports and who is listed as the consignee.
This guide explains:
- When a K1 form is required.
- Why Self-billing isn’t always the solution.
- The difference between “consignee” and “receiver.”
- How to simplify compliance using logistics services.
What is a K1 Form?
The K1 form is a customs declaration document created during the customs clearance process in Malaysia. It includes:
- The consignee’s name (who is responsible for the goods at customs).
- Details of the imported goods.
- Taxes and duties paid, such as SST or import duty.
It is a key document for customs compliance and is needed if you plan to do Self-billing.
Common Misunderstanding: Consignee vs. Receiver
A common question we get from buyers is:
“I keyed in my company name as the receiver in your Izyim/LITE system. Why do you say I’m not the consignee?”
Here’s the difference:
- Receiver (customer’s understanding): The company name or person you entered as the delivery destination in our system. This is for logistics purposes, where the goods are sent after Malaysia Customs clearance.
- Consignee (customs’ definition): The party listed on the K1 form during the Malaysia Customs clearance process. This is the entity responsible for paying duties, taxes, and complying with import regulations.
In CIEF’s Door to Door Service, we are the consignee on the K1 form for Malaysia Customs purposes. This is why you don’t need to handle customs or request a K1 form.
When Do You Need a K1 Form?
You need a K1 form if:
- Your company is the consignee (customs):
- If your company name is listed on the K1 form, you must handle customs clearance and taxes.
- You are managing imports yourself:
- This includes applying for permits like SIRIM or MAQIS, paying duties, and completing Self-billing.
- You plan to do Self-billing:
- Self-billing requires details from the K1 form to complete the process.
If these conditions apply, a K1 form is mandatory.
Why Self-Billing Doesn’t Work for Everyone?
Self-billing has been suggested as a way to solve e-invoice compliance, but it’s not always practical. Here’s why:
- Self-billing requires a K1 form:
Without a K1 form, you cannot input the necessary details to complete Self-billing. - Most buyers are not the consignee:
If you use a logistics service like Izyim/LITE from CIEF, CIEF is the consignee for customs. This means you don’t have access to the K1 form or need to handle customs yourself.
How to Simplify Compliance
The easiest way to meet e-invoice requirements without dealing with K1 forms or Self-billing is to use a logistics service that provides a complete solution. Here’s how it works:
We act as the consignee (customs):
CIEF is listed as the consignee on the K1 form, handling all customs processes.
You pay in Malaysian Ringgit (MYR):
Transactions are simplified with local currency payments.
We provide a Malaysia local e-invoice:
Once the goods are cleared, we issue a local invoice, so you can treat the transaction as a local purchase.
End-to-end management:
From shipping and permits to taxes and invoices, we take care of everything.
Two Common Scenarios
Here’s a comparison to clarify when you need a K1 form:
Scenario 1: Self-managed Imports (FCL/LCL)
- Your company is the consignee.
- You handle customs, taxes, and permits.
- You need a K1 form for Self-billing.
Scenario 2: Using a Logistics Service (e.g., CIEF’s Door to Door Service)
- The logistics company is the consignee.
- They handle customs, taxes, and permits.
- You receive a Malaysia local e-invoice and don’t need a K1 form.
Conclusion
Understanding the difference between “consignee” (for Malaysia Customs) and “receiver” (for delivery) is key to avoiding confusion. If your company isn’t the consignee listed on the K1 form, you don’t need to worry about customs clearance, Self-billing, or K1 forms.
Using a logistics service simplifies the process, ensuring compliance with Malaysia’s e-invoice system without the hassle.
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