Malaysia e-Invoice Implementation: Phases & Timelines (June 2025 Update)

e-Invoicing in Malaysia is being rollout into five phases, each with its own implementation and relaxation period, following major updates by the Inland Revenue Board of Malaysia (IRBM). The phased approach is based on annual turnover, beginning with businesses above RM100 million from August 2024, and ending with those above RM1 million from July 2026. Also, businesses with annual turnover below RM500,000 are now fully exempt. 

Businesses of each phase are also granted a 6 month relaxation period starting from the mandate date during which, businesses enjoy flexibility such as consolidated invoicing, relaxed requirements for product/service descriptions, and immunity from penalties for non-compliance. 

E-Invoice Guidelines Update – June 2025

• Revised Implementation Timeline: IRBM has updated the rollout into five phases, with new thresholds at RM5 million and RM1 million annual turnover.
• New Exemption Threshold: Businesses with less than RM500,000 annual turnover are now exempt from mandatory e-invoicing (up from RM150,000 previously).
• Consolidated e-Invoice Restrictions: Effective 1 January 2026, for any transaction above RM10,000, individual e-invoices are compulsory—consolidated invoices are not allowed.

Understanding e-Invoicing

The e-Invoice initiative in Malaysia is a government-led effort to digitize the invoicing process for businesses. It replaces traditional paper or PDF invoices with a standardized, machine-readable format that can be seamlessly integrated with accounting systems and tax authorities. The Inland Revenue Board of Malaysia (IRBM) has introduced the MyInvois System, a centralized platform for e-Invoice validation, storage, and sharing.

Malaysia e-Invoicing Implementation Timeline

E-invoices for large corporations in Malaysia began on August 1, 2024, as part of a phased rollout. The e-invoice implementation timeline is structured across five phases based on business turnover:

Note:

• The above applies to both companies and non-corporate taxpayers, with turnover or revenue determined using FY2022 records.
• Businesses with annual turnover below RM500,000 are now fully exempt from the e-invoice mandate.

Relaxation Period for e-Invoice Implementation

The Inland Revenue Board of Malaysia (IRBM) has introduced a six-month relaxation period for businesses in each phase to ease the transition. During this time:

• Businesses can issue consolidated e-invoices for all transactions, including B2B transactions.
• More flexible product/service descriptions are permitted.
• No penalties will be imposed under Section 120 of the Income Tax Act 1967 for non-compliance. 

However, from 1 January 2026 onwards: For any transaction exceeding RM10,000: Businesses must issue an individual e-invoice. Consolidated e-invoices are not permitted for such transactions.

Key Phases of Malaysia’s e-Invoice Implementation

Businesses falling under different phases of implementation has separate compliance requirements as of now. 

Phase 1 e-Invoice Implementation

For businesses with annual revenue less than RM100M, Starting February 1, 2025, Phase 1 businesses must comply with full e-invoice requirements, including:

• B2B Invoice Validation: Separate e-invoices for B2B transactions, B2C transactions can be consolidated.
• Schema Compliance with IRBM guidelines.
• System Readiness: Businesses must validate historical data, conduct system stress testing, and implement automated workflows.

Phase 2 e-Invoice Implementation

For businesses with annual revenue between RM 25Million – RM100 Million during their relaxation period until June 30, 2025, Phase 2 businesses can:

• Issue consolidated e-invoices for B2B and B2C transactions.
• Manually upload e-invoices via the MyInvois Portal (API integration optional).

Recommendations for Phase 2 Businesses:

• ERP System Gap Analysis to ensure e-invoicing compatibility.
• Gradual Integration of ERP and accounting systems.
• Pilot Testing for high-volume transactions.
• Staff Training on rejection workflows & schema updates.

After June 30, 2025, full compliance is required, including mandatory separate B2B validation.

Phase 3 e-Invoice Implementation

Who: Businesses with annual revenue between RM5 million and RM25 million.

Timeline: Starts 1 July 2025; relaxation period ends 31 December 2025.

Preparation Tips:

• Register for MyInvois sandbox access by April 2025.
• Digitize key data and upgrade accounting software for seamless compliance.

Phase 4 e-Invoice Implementation

Who: Businesses with annual revenue between RM1 million and RM5 million.

Timeline: Begins 1 January 2026; relaxation period ends 30 June 2026.

Key Action Items:

• Assess system compatibility and digitize master data.
• Plan cost-effective integrations with MyInvois.

Phase 5 e-Invoice Implementation

Who: Businesses with annual turnover up to RM1 million.

Timeline: Starts 1 July 2026; relaxation period until 31 December 2026.

Note: If your business Turnover is below RM500,000, you are exempt from e-invoicing altogether.

e-Invoice Non-Compliance Penalty

Starting February 1, 2025, Phase 1 businesses must fully comply with e-invoicing regulations, with penalties enforced for any violations. Similarly, Phase 2 businesses will face enforcement beginning July 1, 2025.

Failure to issue an e-invoice is considered an offense under Section 120(1)(d) of the Income Tax Act 1967. Non-compliant businesses may be subject to:

• A fine ranging from RM200 to RM20,000, or
• Imprisonment for up to six months, or
• Both penalties, for each instance of non-compliance.

How ClearTax Can Help Meet e-Invoicing Implementation Deadlines?

ClearTax is an MDEC-accredited e-invoicing solution provider in Malaysia, offering seamless API-based integration to help businesses comply with MyInvois requirements.

• End-to-end ERP integration with MyInvois for automated e-invoicing
• Multi-channel e-invoicing support (POS, e-commerce, ERP, and accounting software)
• Real-time validation & compliance monitoring to prevent penalties
• Buyer portal & self-billing support to streamline B2B & B2C invoicing

Book a Demo with ClearTax to ensure 100% e-invoicing compliance before the mandatory deadlines.

Conclusion

Malaysia’s e-invoice implementation now follows a five-phase rollout—each with tailored deadlines, relaxation periods, and compliance requirements:

• Phase 1 (Aug 2024): Large corporations (> RM100M turnover)
• Phase 2 (Jan 2025): Upper mid-sized businesses (RM25M – RM100M)
• Phase 3 (Jul 2025): Medium businesses (RM5M – RM25M)
• Phase 4 (Jan 2026): Smaller businesses (RM1M – RM5M)
• Phase 5 (Jul 2026): Small businesses (up to RM1M turnover, except exempted ones)

During the relaxation period, certain flexibilities (such as consolidated invoicing) apply. After the period ends, strict enforcement—including UIN accuracy and timely issuance—is in effect.