e-Invoice Malaysia

E-Invoicing in Malaysia: IRB Implementation Timeline effective 1 August 2024 for Businesses with Over RM100 Million Annual Revenue (Revised on 28 June 2026, utilising details from IRB's e-Invoice General FAQs, last updated on 5 May 2026, and e-Invoice Specific Guidelines published on 20 April 2026 following the Ministry of Finance's announcement on 20 April 2026 regarding the extension).

What is an e-invoice?

• Implemented by the LHDN through the MyInvois system

• Contains the same essential information as a traditional document, for example, suppliers’ and buyers’ details, item description, quantity, price excluding tax, tax, and total amount, which records transaction data for daily business operations

• Replaces paper or electronic documents such as invoices, credit notes and debit notes

How does the e-invoice work?

There are two (2) options for the e-invoice transmission mechanisms for taxpayers' selection:

1. MyInvois Portal

• A portal hosted by IRB.

• Accessible to all taxpayers at no cost.

• Also accessible to taxpayers who need to issue e-invoices where an Application Programming Interface (API) connection is unavailable.

2. Application Programming Interface (API)

• An API is a set of programming code that enables direct data transmission between the taxpayers’ system and the MyInvois system

• Requires upfront investment in technology and adjustments to taxpayers' existing systems

• Ideal for large taxpayers or businesses with substantial transaction volumes

The e-invoice will be submitted to IRB’s central platform for real-time verification via the proposed Continuous Transaction Controls (CTC) Clearance model.

Upon validation, LHDN assigns a Unique Identifier Number, validation date/time and validation link. The supplier must share the validated e-Invoice or its visual representation with the buyer, which may include a QR code.

Purpose

• To digitalise tax administration on transactions between a supplier and a buyer

• To increase tax compliance

Implementation date (As announced by the Ministry of Finance on 20 April 2026 and updated by LHDN on 5 May 2026 on e-invoice General FAQs incorporating the extension (Section 16.1 of the Guidelines and FAQ 104).) Note: The extension did not postpone the mandatory implementation dates. Instead, it extended the interim relaxation period (during which no penalties apply if taxpayers comply with the relaxation rules) until 31 December 2027 for taxpayers in the affected phases. An interim relaxation period applies from each taxpayer's mandatory implementation date as follows:

Taxpayers with annual revenue of:	Mandatory Implementation date	Interim relaxation period
More than RM100 million	1 August 2024	Ended
More than RM25 million and up to RM100 million	1 January 2025	Ended
More than RM5 million and up to RM25 million	1 July 2025	Ended
More than RM1 million and up to RM5 million	1 January 2026	1 January 2026 to 31 December 2027
Below RM1 million	Exempted	Not applicable

1. ** Businesses with an annual turnover or revenue below RM1 million are exempt from mandatory e-Invoice. (FAQ 89, page 39) All persons conducting a business are required to implement e-Invoice in accordance with their respective implementation timeline as outlined under section 1.5 of the e-Invoice Guideline.

   However, the Government of Malaysia has exempted taxpayers with annual turnover or revenue below RM1 million from the issuance of e-Invoice.
   

---

FAQ 90 – Does the exemption apply to all MSMEs? The exemption applies to all categories of taxpayers (e.g., individuals, partnerships, companies, cooperatives, etc.) with an annual turnover or revenue below RM1 million.

Exceptions:

• taxpayers with non-individual shareholder(s) with annual turnover or revenue of at least RM1 million;

• subsidiaries of a holding company with annual turnover or revenue of at least RM1 million; or

• taxpayers having a related company or joint venture with an annual turnover or revenue of at least RM1 million.

---

FAQ 94 - Clarification on “Related Company” A taxpayer is regarded as having a related company for e-Invoice purposes, which is relevant in assessing eligibility for the Micro, Small, and Medium Enterprises (MSMEs) e-Invoice exemption. Under the FAQ:

• ·Companies are regarded as related where a corporate shareholder directly or indirectly controls the operations of another company.

• A corporate shareholder holding at least 20% of the issued share capital in another company is treated as having control of the other company.

• Companies will still be regarded as related even where shareholding is below 20% if control over operations subsists, for example, where such control is provided under a shareholders' agreement.

• Where companies are owned solely by individual shareholders (including situations involving common individual shareholders or common directors without shareholding), the companies are not regarded as related companies for e-Invoice purposes.

• The presence of a related company with annual turnover or revenue of at least RM1 million would disqualify the MSMEs exemption.

2. During the interim relaxation period, the Government of Malaysia has agreed to allow taxpayers to adopt the following: a. Issue consolidated e-invoice for all activities and transactions, including the industries or activities, listed under Section 3.7 of the e-invoice specific guidelines. b. Issue consolidated self-billed e-invoice for all self-billed circumstances outlined under Section 8.3 of the e-invoice specific guidelines. c. Input any information or details in the "description of product or service" field in the consolidated e-invoice or consolidated self-billed e-invoice. In other words, taxpayers are not restricted to input the receipt/statement/bill reference numbers as required under Sections 3 and 4 of the e-invoice specific guidelines. d. not to issue individual e-invoices or individual self-billed e-invoices, even if the buyer (in the case of e-invoices) or supplier (in the case of self-billed e-invoices) has made a request for an individual e-invoice or individual self-billed e-invoice to be issued, provided that the taxpayers comply with item (a) or (b) above, as the case may be. Additionally, the IRB will not undertake any prosecution action during the interim relaxation period on non-compliance with the e-invoice requirements, provided that taxpayers comply with item (a) or (b) above.
   

3. Individual e-invoice vs Consolidated e-invoice Upon expiry of the applicable interim relaxation period, businesses must issue individual e-Invoices for any transaction exceeding RM10,000. Such transactions cannot be included in consolidated e-Invoices.

---

This document is a summary based on information available on the LHDN's website as of 20 April 2026, and the LHDN's updated FAQs on e-invoicing released on 5 May 2026. It aims to offer a general overview of the topic. It should not be used as a foundation for tax advice in specific situations or for making business decisions. GSK & Associates cannot accept responsibility for any losses incurred by individuals acting or refraining from acting based on the content of this publication. Readers are advised to seek professional advice before taking action based on this document.

Should you require further clarification, please do not hesitate to contact our Partner, Mr Gunalan Appalasamy, at 03-6416 0151 or by email at gunalan@gskassociates.net.