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.
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.
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:
Phase | Targeted Taxpayers (Annual Turnover) | Implementation Date | End of Relaxation Period |
Phase 1 | > RM100 million | 1 August 2024 | 31 January 2025 |
Phase 2 | > RM25 million to RM100 million | 1 January 2025 | 30 June 2025 |
Phase 3 | > RM5 million to RM25 million | 1 July 2025 | 31 December 2025 |
Phase 4 | > RM1 million to RM5 million | 1 January 2026 | 30 June 2026 |
Phase 5 | Up to RM1 million | 1 July 2026 | 31 December 2026 |
Note:
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:
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.
Businesses falling under different phases of implementation has separate compliance requirements as of now.
For businesses with annual revenue less than RM100M, Starting February 1, 2025, Phase 1 businesses must comply with full e-invoice requirements, including:
For businesses with annual revenue between RM 25Million – RM100 Million during their relaxation period until June 30, 2025, Phase 2 businesses can:
Recommendations for Phase 2 Businesses:
After June 30, 2025, full compliance is required, including mandatory separate B2B validation.
Who: Businesses with annual revenue between RM5 million and RM25 million.
Timeline: Starts 1 July 2025; relaxation period ends 31 December 2025.
Preparation Tips:
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:
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.
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:
ClearTax is an MDEC-accredited e-invoicing solution provider in Malaysia, offering seamless API-based integration to help businesses comply with MyInvois requirements.
Book a Demo with ClearTax to ensure 100% e-invoicing compliance before the mandatory deadlines.
Malaysia’s e-invoice implementation now follows a five-phase rollout—each with tailored deadlines, relaxation periods, and compliance requirements:
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.