E-Invoicing in Malaysia: Latest Guidelines, Timelines & Exemptions

As Malaysia continues its digital transformation journey, the e-invoicing framework has seen significant developments in recent months. This follow-up blog provides an informational update on the latest changes, clarifications, and key timelines as outlined in the Inland Revenue Board of Malaysia’s (IRBM) latest FAQ, updated on 15 June 2025.

The E-Invoice at a Glance

An e-Invoice in Malaysia is a structured, machine-readable digital document (XML or JSON format), representing a transaction between a supplier and a buyer. It is validated by the IRBM and transmitted either via the MyInvois Portal or an API integration—adopting the Continuous Transaction Control (CTC) model to ensure real-time oversight and compliance.

Key Updates on Implementation

1. Who Must Issue E-Invoices?

• All taxpayers conducting commercial activities in Malaysia are required to issue e-Invoices.
• There are no industry-wide exemptions, though certain persons, income, and expenses may be exempted as detailed in the e-Invoice guidelines

2. Phased Rollout Timeline

New Businesses and Special Cases: Implementation Pathways for MSMEs

Malaysia’s e-Invoice implementation is designed to be inclusive yet flexible, especially for new businesses and micro, small, and medium enterprises (MSMEs). The Inland Revenue Board of Malaysia (IRBM) has provided detailed guidance in Part 3 of its FAQ to address the unique circumstances faced by these businesses.

1. Understanding the MSME Exemption Criteria

Not all MSMEs are immediately required to adopt e-Invoicing. The IRBM has set clear exemption criteria, primarily based on annual turnover or revenue and business structure:

• Exemption Threshold: Businesses with an annual turnover or revenue below RM500, 000 are exempted from e-Invoice requirements, provided they also meet other MSME criteria as outlined by IRBM.
• Qualifying as an MSME: The business must be independently owned, not part of a larger group, and fulfil specific ownership and control conditions.

2. Implementation Timelines for Existing and New Businesses

A. Existing Businesses (Established Before 2022)

• Taxpayers that are not able to meet the e-Invoice exemption criteria will fall under Phase 5 (i.e., e-Invoice implementation starting from 1 July 2026) as the taxpayer’s YA2022 annual turnover or revenue did not exceed RM1 million. 5
• Since the exemption criteria were not met, the taxpayer is required to implement e-Invoice starting from 1 July 2026.

B. New Businesses (Commenced in YA2023 to YA2025)

If your annual turnover reaches or exceeds RM500, 000 in any of these years, you must implement e-Invoice from 1 July 2026.

If your turnover remains below RM500, 000 and you meet the MSME exemption criteria, you are exempt. If you later cross the RM500, 000 threshold, your obligation starts 1 January in the second year after that year.

C. Businesses Not Meeting MSME Criteria

Regardless of turnover, if you do not meet the exemption criteria, you are required to implement e-Invoice based on the standard phased timeline (typically 1 July 2026 for businesses with turnover below RM1 million).

D. Businesses Established from YA2026 Onwards

If you do not meet the MSME exemption criteria, you must implement e-Invoice from 1 July 2026 or your business commencement date, whichever is later.

If you do meet the exemption criteria, you are only required to implement e-Invoice from 1 January in the second year after your turnover exceeds RM500, 000.

What’s next?

• The phased approach allows businesses of all sizes to prepare and adapt their systems.
• The IRBM continues to provide support, including a Software Development Kit (SDK) and detailed guidelines for integration.
• Businesses should review the latest FAQ and ensure compliance with the updated timelines and requirements.

Conclusion
Malaysia’s e-Invoicing framework is steadily progressing toward full-scale implementation, with clear timelines and thoughtful exemptions tailored to different business scenarios. The IRBM’s June 2025 FAQ update reinforces its commitment to a transparent and inclusive rollout, especially for MSMEs and newly established businesses. As the deadlines approach, it is crucial for taxpayers to stay informed, assess their readiness, and initiate timely integration—whether via the MyInvois Portal or API. Proactive preparation will ensure seamless compliance and future-proof digital operations in Malaysia’s evolving tax ecosystem.

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