Introduction to Malaysia E-Invoicing
The Malaysian government has embarked on a major tax digitalisation journey with the introduction of the electronic invoicing (e-Invoice) mandate, overseen by the Inland Revenue Board of Malaysia (IRBM or LHDN).
This initiative aims to improve tax compliance, streamline business processes, and align Malaysia with global best practices in digital trade documentation.
If you operate in Malaysia — whether you’re a large corporation, an SME, or a freelancer — e-invoicing will impact how you issue, store, and manage invoices.
This guide breaks down what e-invoicing is, why it’s being implemented, the phased rollout, technical requirements, exemptions, penalties, and how to get ready.
How It Works
- 1 Invoice creation in accounting/ERP system
- 2 Submission to LHDN's MyInvois system
- 3 Validation by IRBM
- 4 Assignment of UIN & QR code
- 5 Delivery to buyer
Why Malaysia is Adopting e-Invoicing
- Enhanced tax compliance
- Improved efficiency & reduced paperwork
- Global trade compatibility (Peppol)
- Minimized invoice fraud & disputes
Implementation Timeline
| Phase | Annual Turnover | Start Date | Enforcement Date |
|---|---|---|---|
| Phase 1 | > RM100M | 1 Aug 2024 | 1 Feb 2025 |
| Phase 2 | RM25M – RM100M | 1 Jan 2025 | 1 Jul 2025 |
| Phase 3 | RM5M – RM25M | 1 Jul 2025 | Ongoing |
| Phase 4 | RM1M – RM5M | 1 Jan 2026 | Grace period |
| Phase 5 | RM500K - RM1M | 1 Jul 2026 | Relaxation to Dec 2026 |
Exemption: Businesses (< RM500k turnover) are exempt from Malaysia E-Invoicing requirements.
Transactions Covered
Mandatory
- B2B (Business-to-Business)
- B2G (Business-to-Government)
Conditional
B2C (Business-to-Consumer)
Only if requested, except transactions over RM10,000 from 1 Jan 2026
Technical Requirements
File Format
XML or JSON (UBL 2.1 standard)
Mandatory Fields
55 total
Digital Signature
Required for authenticity
Retention Period
7 years
QR Code & UIN
Must be included in issued invoice
Security
Real-time validation by IRBM
Exemptions
Certain entities do not need to issue e-invoices:
Penalties for Non-Compliance
Under the Income Tax Act 1967 (Section 120):
Fine
RM200 – RM20,000
Imprisonment
Up to 6 months
Both penalties possible per offence
How to Prepare for Malaysia E-Invoicing
Step 1: Identify Your Compliance Phase
Determine which phase applies to your business based on annual turnover.
Step 2: Choose Submission Method
Select between MyInvois portal or API integration based on your volume and technical capabilities.
Step 3: Upgrade Accounting Systems
Ensure your systems can output XML/JSON format for e-invoice submission.
Step 4: Train Staff
Educate your team on LHDN e-invoice procedures and requirements.
Step 5: Test Using Sandbox
Use IRBM's sandbox environment to test your e-invoicing setup before going live.
Benefits of Early Adoption
Faster Payment Cycles
Streamlined invoicing process reduces payment delays and improves cash flow.
Improved Accuracy
Real-time validation reduces errors and ensures compliance with reporting standards.
Compliance Assurance
Meets both local LHDN requirements and international e-invoicing standards.
Global Trade Ready
Facilitates cross-border transactions and compliance with international regulations.
Key Dates to Remember
Frequently Asked Questions
Do I need e-Invoice for every sale?
Only B2B/B2G transactions are always required. B2C only if requested or if over RM10,000 from 2026.
Can I issue a PDF invoice?
Yes, but it must include the IRBM-issued QR code and UIN.
What if my business earns under RM500k annually?
You're exempt from e-invoicing requirements.
How long do I need to keep e-invoices?
At least 7 years as per regulatory requirements.
What is a Self-Billed E-Invoice in Malaysia?
A self-billed e-invoice is a special type of e-invoice issued by the buyer instead of the supplier. This is required in specific situations, such as when a Malaysian business makes payments to a foreign supplier or for certain expense reimbursements.
What is a consolidated e-invoice and when is it submitted?
A consolidated e-invoice combines multiple transactions from a single month, primarily for high-volume B2C sales like in retail & F&B. It must be submitted to the tax authority within seven days of month-end, simplifying the process by replacing numerous individual invoices with just one.
Common Challenges
Manual Processes
Small businesses without API integration face manual submission challenges.
No Post-Submission Editing
Invoices must be cancelled and reissued for corrections.
Learning Curve
Staff need training on XML/JSON formatting and new procedures.
Ready to implement e-invoicing?
We will assess your current invoicing in a short call and provide a clear roadmap and fixed-price quote.
Recommended Resources
LHDN Malaysia
Lembaga Hasil Dalam Negeri Malaysia / Inland Revenue Board of Malaysia (IRBM)
Hasil PortalDisclaimer: The information provided on this website is intended for general informational purposes only and does not constitute professional, legal, tax, or financial advice. While every effort has been made to ensure the accuracy and reliability of the content at the time of publication, regulations, policies, and requirements may change without prior notice. We make no representations or warranties, express or implied, about the completeness, accuracy, or suitability of the information for any particular purpose. We shall not be held responsible for any loss, damage, or inconvenience arising from the use or reliance on this information. Please refer to official Lembaga Hasil Dalam Negeri Malaysia (LHDN) sources for the most current regulatory updates and seek professional advice when necessary.