Malaysia E-Invoice Updated as at 10 December 2025
The Inland Revenue Board of Malaysia has published the e-Invoice Guideline (Version 4.6) and e-Invoice Specific Guideline (Version 4.5) on 7 December 2025, which primarily introduce minor revisions to the implementation timeline. This article outlines key changes arising from the latest updates, with particular relevance to Micro, Small and Medium-sized Enterprises (“MSMEs”).
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Updated E-Invoice Implementation Timeline
The implementation of e-Invoice in Malaysia is carried out in phases to facilitate a smooth transition. The phased roll-out of e-Invoice is determined by annual turnover or revenue thresholds, allowing taxpayers adequate time to prepare and comply with the requirements.
Below is the mandatory e-Invoice implementation timeline:
|
No
|
Targeted Taxpayers
|
Implementation Date
|
|
1.
|
Taxpayers with an annual
turnover or revenue of more than RM100 million
|
1 August 2024
|
|
2.
|
Taxpayers with an annual
turnover or revenue of more than RM25 million and up to RM100 million
|
1 January 2025
|
|
3.
|
Taxpayers with an annual
turnover or revenue of more than RM5 million and up to RM25 million
|
1 July 2025
|
|
4.
|
Taxpayers with an
annual turnover or revenue of up to RM5 million
|
1 January 2026
|
|
5.
|
Taxpayers with an
annual turnover or revenue of less than RM1 million
|
Exempted, subject to
the conditions set out in Sections 4 and 5 below.
|
The latest update primarily revises the implementation timeline, particularly to give MSMEs sufficient time to adapt to the changes.
For new business or operations commencing between year 2023 and 2025 with annual turnover or revenue of at least RM1,000,000, the e-Invoice implementation date is 1 July 2026.
For new businesses or operations commencing from year 2026 onwards, the e-Invoice implementation date is 1 July 2026 or the date of commencement of operations. However, if the first year’s annual turnover or revenue is less than RM1,000,000, the e-Invoice will only require implementing from 1 January in the second year following the year in which the total annual turnover or revenue reached RM1,000,000.
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Exemptions from Implementing e-Invoice
For the purposes of e-Invoice, the following persons are currently exempted from the obligation to issue e-Invoices, including issuance of self-billed e-invoice, as specified below:
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Foreign diplomatic offices
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Individuals not carrying on a business
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Statutory bodies, statutory authorities and local authorities, in relation to:
- Collection of payments, fees, charges, statutory levies, summons, compounds and penalties by it in carrying out functions assigned to it under any written law; and
- Transaction involving goods sold and services performed before 1 July 2025.
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International organisation, in relation to transactions involving goods sold or services performed before 1 July 2025 (refer to the e-Invoice Guideline for the list of international organisations)
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Taxpayers with an annual turnover or revenue of less than RM1,000,000.
|
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E-Invoice Treatment During Interim Relaxation Period
To facilitate a smooth transition to e-Invoice, the Government of Malaysia provides taxpayers with a six-month interim relaxation period from the mandatory implementation date of each phase:
|
No
|
Targeted Taxpayers
|
Interim Relaxation Period
|
|
1.
|
Taxpayers with an annual
turnover or revenue of more than RM100 million
|
1 August 2024 to 31 January
2025
|
|
2.
|
Taxpayers with an annual
turnover or revenue of more than RM25 million and up to RM100 million
|
1 January 2025 to 30 June 2025
|
|
3.
|
Taxpayers with an annual
turnover or revenue of more than RM5 million and up to RM25 million
|
1 July 2025 to 31 December 2025
|
|
4.
|
Taxpayers with an annual
turnover or revenue of up to RM5 million – 1 January
2026 implementation date
|
1 January 2026 to 30 June 2026
|
|
5.
|
Taxpayers with an annual
turnover or revenue of up to RM5 million – 1 July
2026 implementation date
|
1 July 2026 to 31 December 2026
|
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Does the exemption apply to all MSMEs?
The e-Invoice exemption applies to all categories of taxpayers (e.g. individuals, partnerships, companies, cooperatives, etc.) with an annual turnover or revenue below RM1 million.
However, this exemption does not apply to the following taxpayers:
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Taxpayer with non-individual shareholder(s) (or equivalent) with annual turnover or revenue of at least RM1 million; or
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Taxpayer is a subsidiary of a holding company with annual turnover or revenue of at least RM1 million; or
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Taxpayer has related company* or joint venture with annual turnover or revenue of at least RM1 million.
|
* A “related company” has the meaning assigned to it in Section 2 of the Promotion of Investment Act 1986. In general, a related company is one that controls, is controlled by or is under common control with another company, either directly or indirectly.
Example
B Sdn. Bhd. is a subsidiary of C Sdn. Bhd., a larger company who has already implemented e-Invoice in Malaysia. In 2022, B Sdn. Bhd. has an annual revenue of RM450,000. Even though B Sdn. Bhd. annual revenue is recorded below the RM1 million threshold, B Sdn. Bhd. is not exempted from implementing e-Invoice in Malaysia (as B Sdn. Bhd. is a subsidiary of a company that is required to implement e-Invoice). As such, B Sdn. Bhd. is required to implement e-Invoice on 1 July 2026 (concessionary e-Invoice implementation date).
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For sole proprietors, how will the mandatory implementation be determined if a sole proprietor has more than one business?
For sole proprietors, the determination of the annual turnover or revenue for the RM1 million exemption threshold includes the combined turnover or revenue of all sole proprietorship businesses owned or registered under the sole proprietor’s name.
Example
|
Business
|
Annual Turnover or Revenue (RM)
|
|
CAM Electronic Enterprise
|
200,000
|
|
Connor Tailor
|
550,000
|
|
Coffee Café
|
280,000
|
|
Total annual revenue or turnover
|
1,030,000
|
Since the total annual turnover or revenue as of 31 December 2026 for Connor’s sole proprietorship businesses exceeds RM1 million, he is required to implement e-Invoice starting from 1 January 2028.
For further information, please visit the official website of the Inland Revenue Board of Malaysia at
https://www.hasil.gov.my/en
KAIZEN Group, together with its associate firms in Malaysia, can help the clients to perform these compliances formalities so as to maintain the Malaysia company in good standing. Please call and talk to our professional accountants in Kaizen for further clarification.
KNOWLEDGE
