e-Invoice Implementation Date Malaysia 2026: LHDN Phases & Relaxation Period

The Inland Revenue Board of Malaysia (IRBM) revised the e-Invoicing implementation timeline on 6 June 2025, introducing a new deadline along with a relaxation period. The rollout was initially structured into five phases (as outlined in the table below). However, the fifth phase has since been ruled out following a further announcement. 

On 7 December, the Prime Minister announced that the exemption threshold would be increased from RM500,000 to RM1,000,000 effective 1st January 2026, providing significant relief to businesses, especially small and medium enterprises (SMEs).

e-Invoice Implementation Date in Malaysia

The table below outlines e-Invoice Implementation Date in Malaysia along with turnover thresholds and relaxation periods according to official LHDN announcement.

Note:

• The above applies to both companies and non-corporate taxpayers, with turnover or revenue determined using FY2022 records.
• Businesses with annual turnover below RM1,000,000 are now fully exempt from the e-invoice mandate.
• Businesses of each phase are also granted a 6 month relaxation period (immunity from penalties for non-compliance)
• Effective 1 January 2026, individual e-invoices are mandatory for transactions above RM10,000, consolidated invoices are not allowed

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.

Key Action Items:

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

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. 

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

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)

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.