E-Invoicing in Malaysia became mandatory in August 2024, when the Inland Revenue Board (LHDN) started rolling out e-invoicing through the government’s MyInvois system. The mandate covers B2B, B2C and B2G transactions. It is being introduced in phases based on annual revenue, giving businesses time to prepare for the change.
Key Takeaways
Malaysia’s e-Invoicing Phase 4 applies to businesses with turnover of up to RM5 million from 1 January 2026. The relaxation period has been extended until 31 December 2026.
The e-Invoicing exemption threshold is RM3 million from 1 September 2026, subject to the eligibility criteria prescribed by IRBM.
From 1 January 2026, individual e-Invoices are mandatory for transactions above RM10,000. Consolidated invoices are no longer allowed for these transactions.
Non-compliance can result in fines of up to RM20,000 or imprisonment for up to six months under tax law.
What is an e-Invoice?
An e-invoice, or electronic invoice, is a structured electronic document of a commercial transaction between a seller (supplier) and a purchaser (buyer), in a predefined format (such as XML or JSON), that goes through the IRBM portal in real time for validation and recordkeeping.
What is e-Invoicing in Malaysia and What Are the Mandate Requirements?
According to IRBM’s latest e-Invoicing guidelines, businesses must generate, submit and validate e-Invoices in real time through the MyInvois system.
E-Invoices are required for B2B, B2C and B2G transactions and must follow the UBL 2.1 format in XML or JSON.
Businesses can generate and submit e-Invoices manually through the MyInvois Portal or automate the process through direct API integration.
Each e-Invoice must contain 55 specific data fields. These cover seller and buyer details, transaction items, quantities, prices, taxes, totals and payment information.
All e-Invoices must be digitally signed using a Digital Certificate issued by IRBM.
e-Invoicing Malaysia Implementation Timeline & Deadlines [Updated July 2026]
Taxpayers with annual turnover or revenue of up to RM5 million, subject to the MSME exemption criteria
All businesses operating in Malaysia (except the exemptions) must comply with e-invoicing mandate once their annual turnover or revenue reaches the threshold set for each rollout phase.
Note:
Phase 4 taxpayers can avail the LHDN extension till 31 December 2027. However, during the relaxation period, consolidated e-invoices are permitted, except for individual transactions exceeding RM 10,000. For the above RM 10,000 transactions individual must be issued from 1 January 2026.
Taxpayers with annual turnover or revenue below RM3 million may be exempt from e-Invoice, including self-billed e-Invoice requirements, provided they meet IRBM’s exemption criteria.
Annual turnover thresholds are determined based on the Audited Financial Statements (statement of comprehensive income) of the Financial Year 2022. Once a phase is assigned, subsequent changes in turnover will not have any impact on the implementation go live date.
Determination of Annual Turnover or Revenue for e-Invoicing
The key reference for determining your phase (or exemption) is your audited financial statement or tax return for the relevant Year of Assessment (YA) by default it YA2022 or your first available year if your business is new.
If your annual turnover or revenue is below RM3,000,000 and you meet IRBM’s exemption criteria, you are exempt from e-Invoice implementation.
If your annual turnover or revenue is RM3,000,000 or more, your e-Invoice implementation date depends on the relevant Year of Assessment. Businesses that reach this threshold in YA2023, YA2024 or YA2025 must implement e-Invoicing from 1 July 2026. For businesses that reach the threshold in YA2026 or later, e-Invoicing starts from 1 January of the second year following the relevant YA.
For sole proprietors, the revenue from all owned businesses is added together.
Your phase and start date are set by the highest annual revenue reported in the relevant year.
Taxpayers that now meet the RM3,000,000 exemption threshold and eligibility criteria may discontinue issuing e-Invoices immediately. No separate application or prior IRBM approval is required. They may also choose to continue issuing e-Invoices voluntarily.
Regularly check your revenue and use your official audited accounts to confirm your compliance status.
e-Invoicing Process in Malaysia
The e-Invoicing process in Malaysia depends on how you submit the e-Invoice. You can use the API or the MyInvois Portal. The process also varies depending on whether the transaction is B2B or B2C. However, most of the steps remain the same.
Here is a general overview:
e-Invoicing Process for B2B Transactions
Issuance: Supplier creates and sends e-Invoice to IRBM via MyInvois Portal or Business system integrated with MyInvois System via API.
Validation: IRBMvalidates the e-invoice in real-time. A Unique Identifier Number is issued.
Notification: IRBM notifies both supplier and buyer of the validated e-invoice.
Sharing: Supplier shares validated e-Invoice with buyer, including a QR code.
Rejection/Cancellation: Within 72 hours, the buyer can request rejection and the supplier can cancel. However, justification is required for any changes and rejection.
Sharing Human Readable format: Suppliers can then share human readable (PDF, JPG) format of the e-invoice.
e-Invoicing Process for B2C Transactions
Suppliers must issue e-invoices for all B2C transactions. However, many buyers, particularly end consumers and specific businesses, do not need an e-invoice.
Therefore, the generation of e-invoices for B2C transactions varies based on the buyer's requirements:
When the buyer requests an e-Invoice: The supplier collects the required details from the buyer or consumer and generates the e-Invoice in real time, similar to the B2B process.
When the buyer does not require an e-Invoice: The supplier can consolidate these transactions into a monthly consolidated e-Invoice, as allowed by IRBM.
The process is clearly explained in the chart below for Malaysia B2C e-Invoicing.
e-Invoicing Model in Malaysia
In Malaysia, companies can choose from the following transmission modes to report e-invoices known ase-invoicing models
MyInvois Portal
The MyInvois Portal allows users to generate e-invoices manually, either one at a time or in bulk by uploading a spreadsheet in a predetermined format.
This portal is ideal for Micro, Small, and Medium-sized Enterprises (MSMEs) or companies with lower transaction volumes due to the need for manual data entry.
The portal can be accessed at preprod-mytax.hasil.gov.my or mytax.hasil.gov.my.
Businesses can integrate their ERP, billing, or accounting systems with the MyInvois system through an API. This integration enables the automatic generation, sending, receiving, and correction of e-invoices directly through their systems, making it possible to handle large volumes of transactions in real-time.
Recognizing the complexity of this integration, the Lembaga Hasil Dalam Negeri (LHDN) has introduced the e-invoice Malaysia Software Development Kit (SDK).
Type of e-Invoices in Malaysia
The below documents must be issued in electronic format under Malaysia e-Invoice:
Invoices: It is generally used to record transactions between supplier and buyer. Invoices also include aself-billed invoice issued for tracking expenses.
Credit notes: A credit note is a document issued by sellers to make corrections to an e-Invoice issued previously mainly to lower the original invoice's value without returning money to the Buyer. It is generally used to adjust errors, apply discounts, oraccount for returned items.
Debit notes: In contrast to credit notes, debit notes are issued to record additional costs related to a previously issued e-Invoice.
Refund notes: A refund e-Invoice is an official document issued by a Seller to record refund issued to the Buyer.
e-Invoice Exemptions in Malaysia
While e-invoicing is mandatory for most businesses operating in Malaysia, certain entities are specifically exempt from these requirements. Exemptions apply to the following:
Foreign diplomatic offices.
Individuals not conducting business.
Statutory bodies, authorities, and local authorities (for the collection of fees, charges, or statutory levies, and for transactions conducted before 1 July 2025)
International organizations (for transactions before 1 July 2025).
Taxpayers with annual turnover or revenue below RM3,000,000, provided they meet IRBM’s exemption criteria.
Note: This exemption is unavailable in certain group structures, including where the taxpayer has a non-individual shareholder, holding company, related company, or joint venture with annual turnover or revenue of at least RM3,000,000.
Challenges of e-Invoicing for Businesses in Malaysia
The shift to e invoicing in Malaysia brings several challenges:
Compliance: Complying with the e-invoicing regulations for business through technological integrations is extremely challenging.
Technological Transition: Moving from manual to automated invoicing systems requires adaptation to new technologies, deep tech integrations and staff training.
Resistance to Change: Employees accustomed to traditional methods may resist adopting e-invoicing in Malaysia.
Feasibility: Smaller businesses with limited IT infrastructure and lower resources would struggle with the technological demands.
Data Accuracy and Integration: Integrating e-invoicing with existing systems and ensuring accurate data exchange is challenging.
Case Studies
Malaysia’s e-invoicing mandates require efficient compliance, automation, and data security. Here is how ClearTax delivered robust solutions for high-volume, complex business needs.
Case Study 1: Insurance Leader’s E-Invoicing Compliance
A major Malaysian insurer automated high-volume invoicing and met BNM’s RMiT standards across multiple ERPs.
Challenge: Strict B2C regulations, password-protected invoices, custom templates, B2B invoice consolidation, and strong security across entities.
How can ClearTax help your business with e-Invoicing in Malaysia?
ClearTaxis an MDEC-accredited solution provider for e-Invoice in Malaysia. It integrates your business systems with the IRBM e-invoicing system to automate and ensure 100% compliance in e-invoice generation.
Enterprise Solutions: ClearTax delivers robust solutions for enterprises, integrating seamlessly with any ERP or business system to ensure accurate and efficient e-invoicing.
Integration of Multiple Sales Channels: ClearTax integrates various sales channels—both online and physical—ensuring 100% accuracy in e-invoicing by consolidating all sales into a single, compliant e-invoice.
Buyer Portal: ClearTax provides a web portal and app for buyers to generate e-invoices independently, speeding up billing, reducing queue times, and improving the customer experience.
IRBM Industry Specific FAQ’s
The Malaysian government acknowledges that some industries have more complex business practices and billing systems, making e-invoicing more challenging.
To address these complexities, the IRBM has published industry-specific FAQs as follows:
Here is the completelist of FAQs on Malaysia e-Invoicing, covering topics such as industry-specific queries, the MyInvois portal, MSMEs, and more.
Frequently Asked Questions
What is the best e-invoicing solution for Malaysia?
ClearTax stands out as one of the best e-invoicing solution provider in Malaysia. It facilitates seamless integration of your business system with the MyInvois Portal through API for efficient e-invoicing.
How do I get started with e-Invoicing in Malaysia?
To get started with e-Invoicing in Malaysia, it's essential to evaluate your company's readiness for e-Invoicing. First, determine if e-Invoicing applies to your company or if you wish to opt for it voluntarily. Assess your current ERP system's compatibility with e-Invoicing software and whether it can be seamlessly integrated. Ensure your employees are trained to handle e-Invoicing processes effectively. Lastly, communicate the requirements to all stakeholders and confirm their support for a smooth implementation.
Is e-Invoicing in Malaysia mandatory for all industries?
e-Invoicing is mandatory for businesses across all sizes and industries. However, to facilitate a smoother transition, it's being rolled out gradually in phases, based upon the turnover of each business.
What are the requirements for e-Invoicing in Malaysia?
Digital Certificate is a mandatory requirement for e-Invoicing in Malaysia. A digital certificate will be used for signing. A digital certificate will be issued by IRBM based on the taxpayer's TIN and additional information. It guarantees the e-Invoice's non-repudiation, integrity, and authenticity. It will be valid for three years.
Is e-invoice in Malaysia applicable only to domestic transactions?
No, e-invoice applies to both domestic and international transactions.
What are the security measures for e-Invoicing in Malaysia?
Every e-invoice will feature a digital signature along with a timestamp to ensure its integrity. Upon submission for verification, the IRBM will assign a Unique Identification Number and QR code, enabling online validation of the invoice. Additionally, the IRBM has established a secure and encrypted channel for the transmission and storage of e-invoices.
Has IRBM provided any technical guidance on system integration?
The IRBM has provided general guidelines for e-invoicing, along with specific guidelines and Software Development Kit (SDK) for e-invoicing API integration. These resources are accessible on the IRBM's official website.
Shall I issue an e-invoice for disbursements and reimbursements?
IRBM has yet to decide whether to generate e-invoices for disbursements and reimbursements. The authority may issue guidance in this regard in due course.
Can I cancel the invoice submitted to IRBM?
Yes, the seller can cancel the e-invoice within 72 hours from generation time.
Are all businesses required to issue e-invoices in Malaysia?
Businesses registered in Malaysia must issue e-Invoices in line with the phased implementation timeline, unless they qualify for an exemption. Taxpayers with annual turnover or revenue below RM3,000,000 may qualify for exemption if they meet IRBM’s eligibility criteria.
What are the consequences for failure to issue e-Invoice?
Not issuing e-Invoices would be considered an offense under Section 120(1)(d) of the Income Tax Act 1967. This offence would carry a fine ranging from RM200 to RM20,000, or imprisonment for up to 6 months, or both, for each instance of non-compliance.
Are MSMEs in Malaysia required to implement e-invoice?
MSMEs with annual turnover or revenue below RM3,000,000 may be exempt from implementing e-Invoice if they meet IRBM’s eligibility criteria. MSMEs that do not qualify for the exemption, or whose turnover or revenue reaches or exceeds RM3,000,000, must follow the applicable implementation timeline.
Can eligible MSMEs discontinue e-Invoice issuance following the increase in the exemption threshold to RM3,000,000?
Yes. An MSME with annual turnover or revenue below RM3,000,000 that meets IRBM’s exemption criteria may discontinue issuing e-Invoices immediately. No separate application or prior approval from IRBM is required. The MSME may continue issuing e-Invoices voluntarily.
What is the latest Malaysia e-invoicing update?
Mandatory dates:
RM100 million: 1 Aug 2024
RM25m–RM100m: 1 Jan 2025
RM5m–RM25m: 1 July 2025
Up to RM5m: 1 Jan 2026, subject to the MSME exemption criteria
Exemption now applies to eligible taxpayers with annual turnover or revenue below RM3,000,000. The previous exemption threshold was RM1,000,000.
Is e-Invoicing mandatory for freelancers or micro-businesses?
Freelancers and micro-businesses with annual turnover or revenue below RM3,000,000 may be exempt from e-Invoice if they meet IRBM’s eligibility criteria.The exemption is not automatic or necessarily permanent. If annual turnover or revenue reaches or exceeds RM3,000,000, the taxpayer must implement e-Invoice according to the applicable IRBM timeline. Eligible businesses may still choose to implement e-Invoice voluntarily.
What tax incentives are available for e-invoicing in Malaysia?
Key incentives for e-invoicing in Malaysia include:
Tax deduction up to RM50,000 per year (2024–2027) for e-invoicing implementation costs.
Accelerated capital allowance (claim period reduced to 2 years) for ICT equipment and software if adopted all obligation of e-invoicing during relaxation periods as well.
