e-Invoicing in Malaysia 2026: Guidelines, Requirements, Timeline & Exemptions

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.

1. E-Invoices are required for B2B, B2C and B2G transactions and must follow the UBL 2.1 format in XML or JSON.
2. Businesses can generate and submit e-Invoices manually through the MyInvois Portal or automate the process through direct API integration.
3. Each e-Invoice must contain 55 specific data fields. These cover seller and buyer details, transaction items, quantities, prices, taxes, totals and payment information.
4. All e-Invoices must be digitally signed using a Digital Certificate issued by IRBM.

e-Invoicing Malaysia Implementation Timeline & Deadlines [Updated July 2026]

Below is the updated Malaysia e-invoice implementation timeline, based on annual turnover, and the relaxation periods for each phase as per LHDN's latest guidelines.

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:

1. 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.
2. 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.
3. 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

1. Issuance: Supplier creates and sends e-Invoice to IRBM via MyInvois Portal or Business system integrated with MyInvois System via API. 
2. Validation: IRBM validates the e-invoice in real-time. A Unique Identifier Number is issued. 
3. Notification: IRBM notifies both supplier and buyer of the validated e-invoice. 
4. Sharing: Supplier shares validated e-Invoice with buyer, including a QR code. 
5. Rejection/Cancellation: Within 72 hours, the buyer can request rejection and the supplier can cancel. However, justification is required for any changes and rejection.
6. 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 as e-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.

For instructions on how to log in for the first time, visit this MyInvois Portal Login and e-invoice generation guide.

Application Programming Interface (API)

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 a self-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, or account 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:

1. Foreign diplomatic offices.
2. Individuals not conducting business.
3. Statutory bodies, authorities, and local authorities (for the collection of fees, charges, or statutory levies, and for transactions conducted before 1 July 2025)
4. International organizations (for transactions before 1 July 2025).
5. 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:

1. Compliance: Complying with the e-invoicing regulations for business through technological integrations is extremely challenging.
2. Technological Transition: Moving from manual to automated invoicing systems requires adaptation to new technologies, deep tech integrations and staff training.
3. Resistance to Change: Employees accustomed to traditional methods may resist adopting e-invoicing in Malaysia.
4. Feasibility: Smaller businesses with limited IT infrastructure and lower resources would struggle with the technological demands.
5. 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.
• Solution: Centralized e-invoicing, custom APIs, password protection, RMiT compliance.
• Result: 97.98% validation rate, 100,000+ e-invoices generated.

Read more on case study PDF

Case Study 2: Aviation Group’s E-Invoicing at Scale

A leading aviation group integrated 30 entities, processing 24 million invoices annually.

• Challenge: Real-time clearance, multi-ERP integration, LHDN compliance, data silos, security.
• Solution: Integration layers for validation, compliance features, bulk cancellations, 24/7 support.
• Result: 99% success, 550,000+ e-invoices in 20 days, scalable system.

Read more on case study PDF

How can ClearTax help your business with e-Invoicing in Malaysia?

ClearTax is 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: 

• Healthcare
• Construction
• Telecommunication
• e-Commerce
• Petroleum Operations
• Insurance and Takaful
• Aviation
• Tourism
• Donations
• Financial Services, Stockbroking and Unit Trust   

Here is the complete list of FAQs on Malaysia e-Invoicing, covering topics such as industry-specific queries, the MyInvois portal, MSMEs, and more.