E-invoice in Malaysia is a major milestone in the country’s digital transformation of tax and business compliance. It was introduced by the Inland Revenue Board of Malaysia (IRBM) in March 2023 and is currently being implemented gradually and will soon be mandatory for all businesses. This system enables real-time electronic exchange of invoice data between businesses and offers low costs, higher efficiency, and environmental safety. Some large and medium-sized companies have already begun using it and the full adoption of this system is expected by 2026. E-invoicing aims to streamline tax reporting, enhance transparency, reduce manual errors and improve operational efficiency for Malaysian businesses. In this guide, we will explore more details into e-invoice in Malaysia, the types of e-invoice, the implementation process and more.
Content Outline
Key Takeaways
Mandatory E-Invoicing Rollout by 2026
Malaysia’s Inland Revenue Board (IRBM) has mandated phased e-invoicing adoption based on business turnover, with full compliance required by 1 January 2026.
Types of E-Invoices and Transaction Coverage
Businesses must issue different e-invoice types (invoice, credit note, debit note, refund note) across B2B and B2C transactions, ensuring detailed real-time validation via IRBM’s MyInvois system.
Submission Models: MyInvois Portal vs API
Businesses can comply using either the MyInvois Portal for manual entry or API integration for automated, high-volume invoice processing through ERP/accounting systems.
E-Invoicing Benefits for Businesses
Advantages include cost savings, enhanced cash flow, faster processing, tax compliance, and digital recordkeeping — all supporting Malaysia’s digital economy goals.
Challenges and Compliance Checklist
Businesses face challenges like system integration, data accuracy, and staff readiness, but can overcome them with proper planning, training, and use of the provided compliance checklist.
What is An E-Invoice In Malaysia?
E-invoice in Malaysia is a digital document that records a transaction between a supplier and a buyer, which is submitted in real time to the Inland Revenue Board of Malaysia (IRBM) for validation through the Mylnvois system. It includes 55 mandatory data fields such as buyer and seller details, item description, pricing, tax and payment information. Once it is validated, the e-invoice is assigned a Unique Identification Number (UIN) and QR code to ensure its authenticity, traceability and compliance with tax regulations.
Who Must Comply With E-Invoicing In Malaysia?
In Malaysia, e-invoicing is becoming mandatory for businesses as part of the Inland Revenue Board of Malaysia’s (IRBM) nationwide digital tax administration initiative. All business entities that meet the turnover thresholds under the phased implementation timeline are required to adopt e-invoicing based on their annual revenue. The requirement applies to all entities, including corporations, partnerships, limited liability partnerships, co-operative societies and other business structures that conduct commercial transactions.
However, not all entities are required to comply with e-invoicing. IRBM has made a clear distinction between those required to comply and those exempt from the requirement, especially during the transitional phases.
Entities Required to Comply with E-Invoicing
All businesses in Malaysia and above the applicable annual turnover thresholds must comply. These include but not limited to:
- Corporations
- Limited Liability Partnerships (LLPs)
- Partnerships
- Co-operative Societies
- Sole Proprietorships
- Business Trusts
- Real Estate Investment Trusts (REITs)
- Property Trust Funds
- Unit Trusts
Entities Exempted From E-Invoicing
| Exempted Entities | Remarks |
| Individuals not conducting business | E-invoicing applies only to business transactions |
| Statutory bodies, authorities, and local authorities | Exempt for fees/levies collected and transactions before 1 July 2025 |
| International organizations | Exempt for transactions conducted before 1 July 2025 |
| Foreign diplomatic offices | Exempt |
| Representative offices and regional offices | Exempt |
| Taxpayers with annual revenue below RM150,000 | Not required to comply unless they exceed the threshold |
| Associations, Trust Bodies, Bodies of Persons | Exempt under current guidelines |
All businesses in Malaysia must assess their entity type and annual revenue to determine their compliance obligations. As the full implementation deadline of 1 January 2026 approaches, non-exempt businesses must be e-invoice ready to meet regulatory requirements and avoid non-compliance risks.
Malaysia E-Invoicing Timeline (Phased Implementation)
To ensure a smooth and structured transition, Malaysia’s Inland Revenue Board (IRBM) has introduced e-Invoicing in phases based on annual turnover thresholds. This phased approach gives businesses time to prepare and integrate the necessary systems for compliance.
Each implementation phase has a relaxation period where businesses can get familiar with the MyInvois platform and address technical or operational issues before full enforcement.
Phased Implementation Schedule
| Implementation Date | Applicable Businesses | Period Ends |
| 1 August 2024 | Businesses with annual turnover exceeding RM 100 million | 31 January 2025 |
| 1 January 2025 | Businesses with turnover between RM 25 million and RM 100 million | 30 June 2025 |
| 1 July 2025 | Businesses with turnover between RM 500,000 and RM 25 million | 31 December 2025 |
| 1 January 2026 | All remaining businesses (except those exempt or with turnover below RM 150,000) | 30 June 2026 |
How Annual Turnover Is Calculated
To determine which phase your business falls into, the following references are used for Financial Year 2022:
- Audited Statement: Based on the Statement of Comprehensive Income
- Non-Audited Statement: Based on the Income Tax Return Form for the Year of Assessment 2022
- Change in Accounting Year: Income for 2022 will be pro-rated to a 12-month period
This phased timeline allows businesses of all sizes to transition smoothly, while ensuring the e-Invoicing framework is robust and fully integrated nationwide by 2026.
How E-Invoicing Works in Malaysia: Step-by-Step Process
The e-invoicing framework by Inland Revenue Board of Malaysia (IRBM) is designed to simplify the invoicing process, increase transparency and ensure compliance through real-time validation. While the process can be slightly different depending on the type of transaction (B2B or B2C) and submission mode (API or MyInvois Portal), the steps are relatively the same.
E-Invoicing Process For B2B Transactions
For Business-to-Business (B2B) transactions, the e-invoicing process ensures both parties are notified and aligned on the invoice details.
- Step1: Issuance – The supplier issues an e-Invoice through the MyInvois Portal or their integrated accounting system via API.
- Step 2: Validation – The IRBM validates the submitted e-Invoice in real time. If accepted, a Unique Identification Number (UIN) and QR code are generated.
- Step 3: Notification – Both the supplier and buyer receive notifications of the validated e-Invoice from the IRBM.
- Step 4: Sharing – The supplier shares the validated invoice with the buyer, which includes the QR code for verification.
- Step 5 Rejection or Cancellation – The buyer can request a rejection within 72 hours, and the supplier can cancel the invoice with valid justification.
- Step 6 Human-Readable Format – The supplier may also share a human-readable version (PDF or JPG) of the e-Invoice for convenience.
E-Invoicing Process For B2C Transactions
For Business-to-Consumer (B2C) transactions, the supplier is responsible for generating e-invoices but the level of details depends on whether the consumer requires a formal e-invoice.
When a buyer requests an e-invoice, the supplier collects the buyer’s details and issues the e-invoice in real-time following the same B2B process.
When the buyer does not require an e-invoice, the supplier may issue a simplified invoice and later submit a monthly consolidated e-invoice to IRBM for such transactions.
E-Invoicing Models in Malaysia
To support the diverse needs of businesses across various industries and sizes, Inland Revenue Board of Malaysia (IRBM) has introduced two official e-invoice submission models: MyInvois Portal and API integration. Each model has its own advantages depending on the transaction volume, technical capability and internal resources of the business.
MyInvois Portal (Manual Submission)
The MyInvois Portal is a web platform for Micro, Small, and Medium Enterprises (MSMEs) or companies that handle lower volume of transactions. Users can generate and submit e-invoices one by one or in bulk via Excel uploads. This portal gives businesses an easy way to comply with e-invoicing compliance without complex computer systems.
| Feature | Details |
| Platform | Web portal by IRBM (live since 28 June 2024) |
| Access URL | mytax.hasil.gov.my |
| Submission Method | Manual entry or Excel spreadsheet upload |
| Environment | Includes testing (preprod) and live environments |
| Resources | MyInvois Portal Login and e-Invoice Generation Guide available |
API Integration (Automated Submission)
Medium to large companies that deal with high volume of transactions can use API integration for a stronger real-time solution. This method lets businesses automate how they create, check, send, and fix e-invoices by connecting with their current ERP, billing, or accounting systems.
To support this method, IRBM has given out a Software Development Kit (SDK) to help developers and system integrators build interfaces that work well between their internal systems and IRBM’s MyInvois platform.
| Feature | Details |
| Platform | Direct system-to-system API connection |
| Submission method | Fully automated via ERP/accounting software |
| Advantages | Real-time, scalable, reduces manual work |
| Tools | e-Invoice Malaysia SDK for developers |
E-Invoice Types in Malaysia
Malaysia’s e-Invoicing system requires businesses to send various transaction documents through MyInvois. These e-invoices are not just for tax compliance but also for accurate financial reporting, recordkeeping and transparency between suppliers, buyers and the Inland Revenue Board of Malaysia (IRBM). Each type of e-invoice has its own purpose and is used in different scenarios depending on the nature of the transaction. Here is an overview of the main types of e-invoices mandated in Malaysia:
| Type of Document | Purpose | Use Case |
| Invoice | Records the sale of goods or services between a supplier and buyer. | Standard invoice issued during B2B, B2C, or B2G transactions. Includes self-billed invoices. |
| Credit Note | Reduces the value of a previously issued invoice without returning actual cash. | Used for returned items, discounts, or correction of overcharges. |
| Debit Note | Increases the amount payable on a previously issued invoice. | Used to charge additional fees or rectify underbilling. |
| Refund Note | Officially records a cash refund issued by the seller to the buyer. | Used when monetary reimbursement is involved, such as order cancellations or overpayments. |
Benefits of E-Invoicing For Malaysian Businesses
E-invoicing offers a wide range of advantages for all sizes of Malaysian businesses by transforming the traditional, manual invoicing process into a streamlined, digital workflow. E-invoicing not only enhances operational efficiency but also supports the government’s broader goal of boosting the digital economy and improving tax compliance across the country.
Here are the key benefits Malaysian businesses can expect from adopting e-invoicing:
Costs Reduction
E-invoicing removes the need to print, mail, and store invoices . This reduces office expenses and lowers the chance of mistakes from manual work helping companies save cash and time.
Operational Efficiency
By digitalizing the invoice generation, checking, and sending digitally, businesses can speed up invoice handling, cut down on processing times, and boost teamwork between departments, suppliers, and customers.
Integrated Tax Compliance
With real-time validation by the IRBM through the MyInvois system, businesses can make sure their tax submissions are correct. This alignment makes it easier to follow Malaysian tax laws and lowers the risk of fines for wrong filings.
Environmental Sustainability
Changing from paper to digital invoices reduces a company’s impact on the environmental footprint, supporting ESG aims and green initiatives in Malaysia.
Better Cash Flow
E-invoicing cuts down on billing disputes, lowers mistakes, and speeds up payment cycles which makes the businesses to manage cash flow more efficiently.
Digital Financial Reporting
Electronic records lead to more accurate, standardized and real-time reporting. This helps make smarter choices and simplifies audit trails.
Support For International Trade
For companies doing business across borders, e-invoicing makes transactions quicker, clearer, and more standard which makes international trade run smoother and more efficiently.
Common Challenges of e-Invoicing in Malaysia
While the benefits are clear, the transition also comes with several operational and technological challenges. Here is a breakdown of the most common challenges and practical strategies to overcome them:
1. Compliance with IRBM Requirements
Challenge: Understanding and keeping up with IRBM’s technical requirements, formats (like UBL 2.1), and timelines can be overwhelming.
Solution: Work with tax advisors or accounting experts who specialize in e-invoicing compliance. Stay updated with IRBM guidelines and use official resources such as the MyInvois Portal. Businesses should also consider onboarding certified e-invoicing solution providers who offer compliance-ready systems.
2. Technological Transition
Challenge: Switching from manual or semi-digital systems to a fully integrated e-invoicing environment requires a major technological shift.
Solution: Start early by evaluating your current accounting or ERP systems and determine the level of integration required. Leverage the IRBM Software Development Kit (SDK) and consider phased implementation, starting with simpler APIs or using the MyInvois Portal while scaling.
3. Employee Resistance to Change
Challenge: Employees who are used to manual processes may resist learning new systems or worry about increased workload.
Solution: Invest in training programs and internal workshops to educate employees on the benefits and usability of e-invoicing. Highlight how automation can reduce manual work and stress, improving accuracy and efficiency in the long run.
4. Feasibility for Small Businesses
Challenge: Micro and small businesses may lack the infrastructure, budget, or IT support to implement sophisticated e-invoicing solutions.
Solution: Utilize the MyInvois Portal, designed specifically for MSMEs to manually upload invoices or use bulk uploads via spreadsheets. Over time, businesses can evaluate gradual automation based on volume and growth.
5. Data Accuracy & Integration Issues
Challenge: Integrating invoice data between internal systems (accounting, inventory, CRM) and the IRBM portal may lead to errors or mismatches.
Solution: Implement robust data validation tools and regular system audits. Choose e-invoicing software that seamlessly integrates with your business systems and supports real-time validation to minimize errors.
Compliance Checklist for e-Invoice in Malaysia
To ensure your business is prepared for e-invoicing under the guidelines issued by the Inland Revenue Board of Malaysia (IRBM), this is a concise compliance checklist that companies can follow:
| Compliance Area | Checklist Item |
| Eligibility Assessment | Confirm if your business falls within the current implementation phase based on annual turnover. |
| System Readiness | Determine if you will use the MyInvois Portal or API Integration model. |
| Technical Integration | For API users, ensure ERP/accounting software is integrated with MyInvois via SDK. |
| e-Invoice Format | Ensure invoice data complies with UBL 2.1 (XML/JSON) standards. |
| Invoice Fields | Prepare to include all 55 mandatory fields: buyer/seller details, tax, QR code, UIN, etc. |
| Process Mapping | Design and document your e-invoicing workflow for both B2B and B2C transactions. |
| Rejection/Cancellation Protocols | Set up internal SOPs for handling rejections/cancellations within the 72-hour window. |
| User Training | Train finance, sales, and operations teams on the issuance and validation process. |
| Record Keeping | Retain validated e-invoices with UIN and QR code for audit and tax purposes. |
| Continuous Monitoring | Stay updated with future IRBM phases and exemptions. |
Conclusion
Malaysia’s move towards mandatory e-invoicing marks a significant milestone in the nation’s journey toward digital tax administration. While the transition involves initial challenges, the long-term benefits far outweigh the challenges. By understanding your obligations, choosing the right implementation model, and proactively upgrading systems and processes, your business can not only meet IRBM’s requirements but also gain a competitive edge in the digital economy.
If you are looking for expert assistance for E-Invoicing compliance, FastLane is here to help your business make for a seamless transition. From API integration support to compliance advisory and setup, our experts ensure you’re always ahead of IRBM deadlines and regulatory changes.
Book a Free Consultation to get started on your e-invoicing journey!
FAQs
1. Who is required to implement e-Invoicing?
All registered businesses in Malaysia will eventually be required to adopt e-invoicing. The rollout is phased based on annual turnover, starting from companies with over RM100 million (since 1 August 2024) down to those with RM500,000 by 1 January 2026. Certain entities like individuals not conducting business or diplomatic missions are exempt.
2. What transactions require an e-invoice?
E-invoices must be issued for B2B (business-to-business), B2C (business-to-consumer), and B2G (business-to-government) transactions, including sales of goods or services, payments, and refunds.
3. What information must be included in an e-Invoice?
Each e-invoice must contain 55 mandatory data fields, including details like:
- Seller and buyer information
- Invoice number and date
- Description of goods/services
- Tax amount
- Total amount
- QR code and Unique Identification Number (UIN)
4. How can I submit an e-Invoice to IRBM?
You can submit via:
- MyInvois Portal – for manual data entry or bulk uploads (ideal for MSMEs)
- API Integration – for large businesses integrating directly from their ERP/accounting systems
5. How is an e-Invoice validated?
Once submitted, the invoice is validated in real-time by IRBM. A Unique Identification Number (UIN) and QR code are then assigned, confirming its acceptance.
6. Can an e-Invoice be cancelled or rejected?
Yes. Within 72 hours of validation:
- Buyers may request a rejection
- Suppliers may cancel the invoice
- A valid justification must be provided for either action.
7. What happens if my buyer doesn’t need an e-Invoice (B2C)?
If the buyer is a consumer who does not require an e-invoice, the seller can consolidate all such transactions into a monthly consolidated e-invoice submitted to IRBM.
8. What are the types of e-invoice documents?
Malaysia’s e-Invoicing system supports:
- Invoices (including self-billed)
- Credit notes
- Debit notes
- Refund notes
10. Where can I access the MyInvois portal?
You can access the MyInvois portal here: https://mytax.hasil.gov.my
