Electronic invoicing (e-invoicing) is transforming how businesses in Malaysia manage billing, accounting, and tax reporting. By digitizing invoices, companies can improve efficiency, reduce errors, and comply more effectively with tax regulations.
On 5 June 2025, the Inland Revenue Board (IRB) of Malaysia announced an updated timeline for the phased implementation of e-invoicing. This update provides additional time for smaller businesses with annual turnover or revenue of up to MYR 5 million to adopt the system. The phased rollout ensures that businesses of different sizes can transition smoothly into the e-invoicing framework.
Key Summary
Updated Phased Rollout
The Inland Revenue Board (IRB) announced a revised e-invoicing timeline on 5 June 2025, extending deadlines for smaller businesses to ensure a smoother transition.
Turnover-Based Implementation
Businesses will adopt e-invoicing in five phases, with deadlines ranging from 1 August 2024 (large corporations) to 1 July 2026 (smaller enterprises with ≥ MYR 500,000 turnover).
Exemption for Micro-Businesses
Companies with annual turnover below MYR 500,000 are currently exempt from implementing e-invoicing requirements.
Interim Relaxation Period
Taxpayers in phases III, IV, and V enjoy a six-month grace period post-implementation, during which consolidated and self-billed e-invoices are permitted without penalties.
Mandatory High-Value E-Invoicing
From 1 January 2026, businesses must issue individual e-invoices for transactions above MYR 10,000, eliminating the option of consolidated invoicing for high-value sales.
Why E-Invoicing is Important
E-invoicing is more than just a digital format for invoices—it is a tool that strengthens compliance and operational efficiency. The benefits for Malaysian businesses include:
- Streamlined Accounting and Reporting: E-invoices integrate directly with accounting software, simplifying bookkeeping and financial reporting.
- Improved Tax Compliance and Audit Readiness: Digital records reduce human error and ensure accurate reporting for tax authorities.
- Reduced Errors and Operational Costs: Automation minimizes manual data entry, preventing mistakes and saving time.
- Supports Government Digitalization Goals: The Malaysian government encourages e-invoicing as part of its broader push for digital transformation in tax administration.
With these advantages, businesses are better positioned to maintain smooth operations while adhering to regulatory requirements.
Updated Timeline for E-Invoice Implementation
The Malaysian e-invoicing system is being rolled out in phases to ensure a smooth and manageable transition for businesses of different sizes. The phased implementation approach allows companies to prepare and adapt their accounting and invoicing systems according to their annual turnover or revenue.
Below is the updated e-invoice implementation timeline announced by the IRB on 5 June 2025:
| Phase | In-Scope Taxpayers | Implementation Date |
| I | Taxpayers with annual turnover > MYR 100 million | 1 August 2024 |
| II | Taxpayers with annual turnover > MYR 25 million and ≤ MYR 100 million | 1 January 2025 |
| III | Taxpayers with annual turnover > MYR 5 million and ≤ MYR 25 million | 1 July 2025 |
| IV | Taxpayers with annual turnover > MYR 1 million and ≤ MYR 5 million | 1 January 2026 |
| V | Taxpayers with annual turnover ≤ MYR 1 million (≥ MYR 500,000) | 1 July 2026 |
Key Notes:
- Taxpayers with annual turnover below MYR 500,000 are currently exempt from e-invoicing requirements.
- Taxpayers in phases III, IV, and V are eligible for a six-month interim relaxation period after their mandatory implementation date, allowing the issuance of consolidated e-invoices.
- From 1 January 2026, individual e-invoices are required for all transactions exceeding MYR 10,000, and consolidated e-invoicing will no longer be allowed for these high-value transactions.
This structured approach ensures that businesses have adequate time to comply with e-invoicing requirements while minimizing disruption to their operations.
Interim Relaxation Period
To help businesses transition smoothly into e-invoicing, the IRB has introduced a six-month interim relaxation period for taxpayers in phases III, IV, and V. This grace period begins immediately after each phase’s mandatory implementation date, giving businesses additional time to comply without facing penalties.
Permitted Actions During the Interim Period
During this six-month period, taxpayers are allowed to:
- Issue consolidated e-invoices: Businesses can combine multiple transactions into a single e-invoice, rather than issuing an individual invoice for every transaction.
- Issue self-billed e-invoices: When buyers request e-invoices, sellers may issue self-billed invoices to meet requirements efficiently.
Waiver of Enforcement Actions
The IRB confirmed there will be no prosecution under Section 120 of the Income Tax Act 1967 during the interim period, as long as consolidated e-invoice requirements are met.
This interim period is designed to reduce compliance pressure on businesses and ensure a smoother adoption of the e-invoice system, especially for small and medium-sized enterprises (SMEs).
Mandatory E-Invoicing for High-Value Transactions
Starting 1 January 2026, all taxpayers subject to full e-invoice implementation must comply with mandatory individual e-invoicing for high-value transactions. This requirement ensures accurate reporting and enhanced transparency for significant business transactions.
Key Requirements
- Individual E-Invoices for Transactions Exceeding MYR 10,000
Each sale of goods or services with a value above MYR 10,000 must be invoiced individually. Consolidated invoicing will no longer be permitted for transactions above this threshold. - Consolidated E-Invoicing No Longer Allowed
The interim relaxation period permitting consolidated e-invoices will no longer apply for transactions exceeding MYR 10,000. Companies must issue a separate e-invoice for each qualifying transaction to remain compliant.
This requirement emphasizes the Malaysian government’s commitment to enhanced digital tax compliance and ensures that businesses maintain accurate and detailed transaction records for audit and reporting purposes.
How Businesses Can Prepare
To ensure a smooth adoption of e-invoicing, Malaysian businesses should start preparing well in advance. Proper planning and system upgrades will help companies remain compliant while minimizing disruption to daily operations. Key steps include:
1. Assess Current Invoicing Systems
Businesses should review their existing invoicing processes to identify gaps or inefficiencies. Understanding the current system helps determine what adjustments or upgrades are needed to support e-invoicing.
2. Upgrade Accounting Software to Support E-Invoicing
Investing in or upgrading accounting software that supports e-invoice generation, submission, and integration with the IRB’s system is crucial. This ensures accurate and timely reporting while reducing manual errors.
3. Train Staff on E-Invoice Processes
Employees involved in finance, accounting, and sales should be trained on e-invoicing procedures. Training should cover creating, issuing, and managing e-invoices, as well as handling self-billed and consolidated invoices during the interim period.
4. Plan for High-Value Transaction Compliance
From 1 January 2026, transactions above MYR 10,000 must be invoiced individually. Companies should implement internal processes to track and issue these e-invoices for compliance.
By following these steps, businesses can leverage the interim relaxation period, avoid last-minute compliance issues, and ensure a seamless transition to full e-invoicing.
Conclusion
The updated e-invoice implementation timeline in Malaysia provides a phased and structured approach to help businesses of all sizes transition smoothly to digital invoicing. With clear deadlines, a six-month interim relaxation period for certain phases, and mandatory individual e-invoicing for high-value transactions from 1 January 2026, businesses are encouraged to plan ahead, upgrade systems, and train staff to ensure full compliance. By preparing early, companies can streamline operations, reduce errors, and stay ahead as Malaysia transitions to full digital tax compliance.
How FastLane Group Can Help
FastLane Group offers expert guidance and support for Malaysian businesses in adopting and complying with the e-invoice system. Our services include:
- Assessment of current invoicing and accounting systems
- Implementation of e-invoice solutions tailored to business needs
- Staff training on e-invoice processes and compliance requirements
- Ongoing support for high-value transaction reporting and IRB submissions
With FastLane Group, businesses can navigate the e-invoice rollout confidently, ensuring smooth compliance and operational efficiency. Contact FastLane today for a tailored consultation and ensure your business is fully prepared for Malaysia’s e-invoice rollout.
FAQs on Latest E-Invoice Implementation Timeline
1: What is the updated e-invoice implementation timeline in Malaysia?
The Inland Revenue Board (IRB) has announced a phased rollout:
- Phase I: Turnover > MYR 100 million – 1 August 2024
- Phase II: Turnover > MYR 25 million up to MYR 100 million – 1 January 2025
- Phase III: Turnover > MYR 5 million up to MYR 25 million – 1 July 2025
- Phase IV: Turnover > MYR 1 million up to MYR 5 million – 1 January 2026
- Phase V: Turnover ≤ MYR 1 million (≥ MYR 500,000) – 1 July 2026
Businesses with turnover below MYR 500,000 are currently exempt.
2: Which businesses are eligible for the interim relaxation period?
Taxpayers in phases III, IV, and V are eligible for a six-month interim relaxation period after their mandatory implementation date. During this period, consolidated and self-billed e-invoices are permitted, easing the transition to full compliance.
3: Are small businesses with turnover below MYR 500,000 required to implement e-invoicing?
No. Businesses with annual turnover or revenue below MYR 500,000 are currently exempt from implementing e-invoicing.
4: From when must individual e-invoices be issued for high-value transactions?
Starting 1 January 2026, all transactions exceeding MYR 10,000 must be issued as individual e-invoices. Consolidated e-invoicing will no longer be allowed for these high-value transactions.
5: How can FastLane Group help businesses implement e-invoicing?
FastLane Group provides end-to-end support for e-invoicing adoption, including system assessment, software setup, staff training, and ongoing compliance guidance to ensure businesses meet IRB requirements efficiently and seamlessly.
