Business
Malaysia — Business: Accounting (e-Invoicing)
Malaysia's e-invoicing mandate rolled out in phases by annual turnover: Phase 1 (RM100m+) August 2024, Phase 2 (RM25-100m) January 2025, Phase 3 (RM5-25m) July 2025, and Phase 4 (RM1-5m) live from 1 January 2026 with a relaxation period until 31 December 2027. MSMEs with annual turnover below RM1,000,000 remain exempt. From 1 January 2026, individual e-invoices are mandatory for transactions above RM10,000 — consolidated invoices are no longer allowed for these. In-scope e-invoices must be submitted in XML or JSON format via the MyInvois portal, an ERP/accounting system with an e-Invoice module, or certified middleware, and validated near-real-time by LHDN before being treated as issued for tax purposes. Non-compliance risks fines up to RM20,000 or 6 months' imprisonment. Records must be retained for 7 years.
Key facts
- Phased e-invoicing rollout by turnover: RM100m+ (Aug 2024), RM25-100m (Jan 2025), RM5-25m (Jul 2025), RM1-5m (Jan 2026, relaxation to Dec 2027).
- MSMEs under RM1,000,000 annual turnover are exempt.
- From 1 Jan 2026: individual e-invoices mandatory for transactions above RM10,000, consolidated invoices no longer allowed for these.
- Non-compliance penalty: fines up to RM20,000 or 6 months' imprisonment; 7-year record retention.
Steps
- Determine phase applicability — Based on annual turnover tier.
- Issue e-invoices via MyInvois or ERP/middleware — XML/JSON format, validated near-real-time by LHDN.
- Retain records for 7 years — Retrieval speed and clarity affect audit outcomes.
Costs
- Non-compliance fine: up to RM20,000
Timelines
- Phase 4 (RM1-5m turnover) live date: 1 January 2026
- Phase 4 relaxation period ends: 31 December 2027
- Record retention period: 7 years
Required documents
- e-Invoice (XML/JSON via MyInvois)
Common mistakes
- Continuing to use consolidated invoices for transactions above RM10,000 after 1 January 2026 — individual e-invoices are now mandatory for these.