As e-Invoice implementation in Malaysia approaches, I want to share my thoughts and experience on what businesses need to do now to ensure a smooth transition before 1 July 2025.
Most businesses will start e-Invoicing from 1 July 2025, which is classified as Phase 3 under LHDN’s rollout plan. However, if your annual sales revenue is between RM150,000 to RM500,000, you fall under Phase 4 and will only be required to implement e-Invoicing from 1 January 2026. Regardless of your phase, it’s important to start preparing now to avoid last-minute compliance issues.
First, let me be clear – e-Invoicing is not difficult, but it will definitely increase the time needed to handle business transactions. Many businesses may find that they need to hire additional staff to manage their sales and purchase cycles. If a company does not have the budget to increase manpower, the existing staff will have to take on additional tasks, making their workload heavier. This is why compliance costs in Malaysia are rising.
I have already implemented e-Invoicing for a month, and from my experience, it is not difficult to run a business with e-Invoice. However, preparation is key. Today, I want to share what you should prepare and get ready before 1 July 2025.
1. Connect Your Business to MyInvois Portal
One of the most critical steps is connecting your business to the MyInvois Portal. Without this, you will not be able to issue e-Invoices.
For different business entities, the process varies:
- Sdn. Bhd. / Private Limited Company – The director plays an important role. The director must apply for the Director Role in MyInvois to connect the company. It is important to check this early because in some cases, the role may still be held by a previous or resigned director who did not update MyTax.
- Partnership Business – The precedent partner must apply as the Organization Administrator to gain access to MyInvois.
If this step is not completed before 1 July 2025 /1 January 2026, you will not be able to issue e-Invoices, which can cause major business disruptions.
2. Issuing E-Invoices
In simple terms, there are two ways businesses can issue e-Invoices:
- Invest in an accounting software that is compliant with LHDN’s e-Invoice system. This will allow you to generate and submit e-Invoices automatically.
- Use the MyInvois Portal, which is free and accessible by all taxpayers. However, businesses with high transaction volumes may find it time-consuming to enter each invoice manually.
For businesses that handle a large number of transactions daily, I highly recommend investing in an automated solution to reduce manual workload.
3. Start Gathering Customer Information
To issue an e-Invoice, businesses need to collect specific customer details in advance. The required details include:
- Customer TIN (Tax Identification Number)
- Business Registration Number (BRN) / NRIC / Passport Number
- SST Registration Number (if applicable)
- Customer Address
- Contact Number
- Customer ’s Email (optional but useful for sending invoices electronically)
The above information is required to be entered into the MyInvois Portal.
It is best to start requesting this information now, rather than waiting until the last minute when customers may take longer to respond.
To make this process easier, I have created a free, editable Client Information Request Form in Excel format that you can download and customize for your business
4. E-Invoice Compliance – What You Need to Know
Many business owners feel overwhelmed when they see the entire e-Invoice Guideline from LHDN. But the good news is, you don’t need to study all the rules. Instead, focus on only the rules that apply to your business.
Here are the key compliance areas that every business should know:
1) What if my customer does not request an e-Invoice?
If the Buyer does not require an e-Invoice, you can issue a normal receipt and submit a monthly consolidated e-Invoice to LHDN
Exception: Some industries must issue an e-Invoice for every transaction, regardless of whether the Buyer requests it. These industries include:
- Automotive – Sale of motor vehicles.
- Aviation – Sale of flight tickets and private charters.
- Construction – Contractors handling construction projects.
- Wholesale & Retail of Construction Materials – Sale of construction-related materials.
- Licensed Betting & Gaming – Payouts to winners.
- Payments to Agents, Dealers, and Distributors – As per Section 83A(4) of the Income Tax Act 1967.
For businesses in these industries, consolidated e-Invoices are NOT allowed, and an individual e-Invoice must be issued for each transaction.
2) What is the deadline for submitting a consolidated e-Invoice?
Within seven (7) calendar days after the end of the month.
For example:
- Transactions from March 2025 → Submit by 7 April 2025
- Transactions from July 2025 → Submit by 7 August 2025
3) What if a customer requests an e-Invoice after receiving a normal receipt?
- The customer must request it within the same month of the transaction.
- Your business must issue an individual e-Invoice instead of including the sale in the consolidated e-Invoice.
- If the request is made after month-end, the request may be denied because the sale has already been consolidated.
4) Can I correct a wrongly issued e-Invoice?
Yes, if an e-Invoice is issued incorrectly, you can correct it using the following options:
- Rejection – If the Buyer has not accepted the e-Invoice.
- Cancellation – If the e-Invoice is invalid.
- Credit Note / Debit Note – If the e-Invoice has been validated and needs adjustment.
5) When can an e-Invoice be rejected?
The Buyer can reject an e-Invoice if:
- There is an error in pricing, quantity, or other details.
- The transaction did not occur.
- The Buyer’s details are incorrect.
6) What is the deadline for rejection?
The Buyer must reject the e-Invoice within 72 hours (3 days) after it is issued.
7) What If I Discover the Error After the 72-Hour Rejection Period?
If the 72-hour rejection window has passed:
- You cannot reject or cancel the e-Invoice.
- You must issue a Credit Note or Debit Note to adjust the mistake.
8) When do I need to issue a self-billed e-Invoice?
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Foreign Supplier Transactions (Cross-Border Transactions)
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Reverse Charge Mechanisms
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Payments to Agents, Dealers, and Distributors
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Insurance Claims, Compensation, and Benefit Payouts
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Interest Payments to the Public
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Transactions Between a Company and Its Overseas Branches or Offices
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Transactions with Individuals Who Are Not Conducting a Business
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Payments Related to Capital Reduction, Share Redemption, Share Buyback, Return of Capital, or Liquidation Proceeds
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Other Situations as Determined by IRBM
9) Do I need to issue a self-billed e-Invoice for rental payments?
It depends on the landlord.
✔ Yes, a self-billed e-Invoice is required if the landlord is an individual who does not conduct business.
❌ No, a self-billed e-Invoice is not required if the landlord is a registered business entity that issues its own e-Invoice.
10) What if my electricity or water bill is under my landlord’s name? Do I need to issue a self-billed e-Invoice?
Yes, you need to issue a self-billed e-Invoice if:
- The landlord does not issue an e-Invoice to you.
- You are paying the utility bills directly, but they are under the landlord’s name.
11) How should my staff handle expense claims under the e-Invoice system?
Employees must request that the supplier issue the e-Invoice under the employer’s name whenever possible
12) What if the supplier issues the e-Invoice under the employee’s name instead of the employer?
If it is not possible to issue the e-Invoice under the employer’s name, the employee can proceed with:
✔ Submitting the e-Invoice issued in their own name as proof of the expense.
✔ Using existing supporting documents (e.g., receipts, bills, statements) as proof of expense for tax purposes
“The e-Invoice regulations and requirements are subject to updates and changes by the Inland Revenue Board of Malaysia (LHDN/IRBM). We strive to stay updated with the latest developments and will provide necessary updates if there are any changes.”
Final Thoughts – Don’t Wait Until the Last Minute
That’s it – preparing for e-Invoice implementation is simple if you start early. Don’t wait until the last minute, because once 1 July 2025(for business more than RM500,000) arrives, business in Malaysia must comply.
LHDN is providing a six-month transition period for businesses, so there’s no need to stress about it. But why rush later when you can prepare now?
💡 Stay connected with us, and I will continue to share more updates, practical insights, and my own first-hand experience on e-Invoicing. If you have any questions, feel free to ask!