Malaysia e-Invoice
- What is an e-Invoice?
An e-Invoice is basically a digital version of a regular invoice. it is created in a way that follows the specific rules set by the Inland Revenue Board of Malaysia (“IRBM? so everything is standardized and easier to handle electronically.
- When is the latest implementation date of E-Invoice in Malaysia?
The latest -Invoice implementation will be as follows:
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Targeted Taxpayers
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Implementation Date
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Businesses with annual revenue of more than RM100 million
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1 August 2024
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Businesses with annual revenue of more than RM25 million but not more than RM100 million
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1 January 2025
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Businesses with annual revenue of more than RM5 million but not more than RM25 million
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1 July 2025
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Businesses with annual revenue of more than RM1 million but not more than RM5 million
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1 January 2026
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Businesses with annual revenue of up to RM1 million
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1 July 2026
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- Are MSMEs in Malaysia required to issue e-Invoice?
Everyone who runs a business in Malaysia are required to implement e-Invoice, based on the timeline outlined in Question 2.
However, the government of Malaysia has given an exemption for businesses with annual revenue of less than RM500,000.
For example
Mr. A runs a small business called A Enterprise. By the end of 2024, Mr. A’s annual revenue from the business was less than RM500,000. Since his business is still below the threshold, Mr. A is not required to issue e-Invoices.
- Does the exemption apply to all MSMEs?
The exemption from implementing e-Invoice with annual revenue of RM500,000 applies to all types of taxpayers, including individuals, partnerships, companies etc.
However, there are exceptions, whereby the exemption does not apply to the following taxpayers:
a. The taxpayer has non-individual shareholder(s) with an annual revenue of RM500,000 or more; or
b. The taxpayer is a subsidiary of a holding company with an annual revenue of RM500,000 or more; or
c. The taxpayer has a related company or joint venture with an annual revenue of RM500,000 or more.
For 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 below the RM500,000 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.
- If my business is in operation as at year of assessment (YA) 2022 and my annual revenue did not reach RM500,000 in YA2022, how should I determine my e-Invoice implementation date?
For businesses that qualify for the e-Invoice exemption, they are not required to implement e-Invoice as long as the annual revenue remains below the threshold of RM500,000. However, if the annual revenue subsequently reached or exceeded the threshold of RM500,000 after operation, they are required to implement e-Invoice starting from 1 July 2026.
For business that do not qualify for the e-Invoice exemption, the e-Invoice implementation date will be on 1 July 2026.
For business that commenced operation after YA2022 (e.g. YA2023, YA2024 & YA2025) and is not eligible for exemption, they are required to implement e-Invoice on 1 July 2026, once the business has reached or exceeded the threshold of RM500,000 in YA2023, YA2024 or YA2025
For business that commenced operation after YA2026 or subsequent YA and is not eligible for exemption, they are required to implement e-Invoice from 1 January in the second year, once the business has reached or exceeded the threshold of RM500,000 in YA2026 or subsequent YA.
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.
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