What is e-Invoicing in Malaysia? A Complete Guide for 2025

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đź“Ś Introduction to e-Invoicing in Malaysia

e-Invoicing is Malaysia’s new digital invoicing system introduced by LHDN (Lembaga Hasil Dalam Negeri) to modernize tax reporting, improve efficiency, and combat tax evasion.

Starting in 2024, businesses will be required to issue and validate invoices electronically through the government’s MyInvois portal, in phases based on annual revenue. By 1 January 2026, e-Invoicing becomes compulsory for almost all businesses in Malaysia.

âś… What is an e-Invoice?

An e-Invoice is a digitally generated invoice that is issued, received, and validated in real time. Unlike traditional PDF or paper invoices, e-Invoices are structured in a machine-readable format (such as XML or JSON) and submitted to LHDN before they are shared with customers.

Each e-Invoice must be validated and timestamped by the MyInvois system, which ensures compliance and data accuracy.

🔍 How e-Invoicing Works in Malaysia

Here’s a simplified step-by-step of how the process works:

  1. Seller issues an e-Invoice via MyInvois or Peppol-ready accounting software.
  2. The invoice is validated in real time by LHDN's MyInvois platform.
  3. LHDN adds a validation signature and timestamp.
  4. The validated invoice is shared with the buyer (via email, PDF, QR code, or system integration).
  5. Both buyer and seller retain the e-Invoice for accounting and audit purposes.

🏢 Who Must Comply with e-Invoicing?

e-Invoicing applies to:

  • All registered Malaysian businesses (Sdn Bhd, sole proprietors, partnerships)
  • Freelancers, online sellers, and service providers
  • Multinational companies operating in Malaysia
  • Government-linked companies (GLCs)
  • Foreign businesses with Malaysian tax presence

đź’ˇ Even small businesses must comply by 2026 unless their turnover is below RM150,000.

🧾 What Types of Transactions Require e-Invoices?

LHDN mandates e-Invoicing for:

  • B2B (Business to Business) sales
  • B2C (Business to Consumer) sales
  • B2G (Business to Government) contracts
  • Exports and imports
  • Credit notes, debit notes, and refunds

🚀 Benefits of e-Invoicing for Malaysian Businesses

  • âś… Faster invoice processing and payment
  • âś… Real-time tax reporting and compliance
  • âś… Reduced human error and fraud
  • âś… Easier audit trails
  • âś… Cost savings on paper and manual processing

🛠️ How to Get Ready for e-Invoicing

  1. Check your revenue tier and timeline.
  2. Upgrade your accounting system to support e-Invoicing and Peppol.
  3. Register with the MyInvois portal or engage a Peppol service provider.
  4. Train your staff on digital invoicing and data accuracy.
  5. Engage your accountant or IT consultant for integration support.

đź“ž Need Help With e-Invoicing Compliance?

We specialize in helping Malaysian businesses:

  • Prepare for LHDN’s e-Invoicing implementation
  • Integrate MyInvois or Peppol-compliant systems
  • Use the suitable accounting software to reduce workload

👉 Contact us today for a free readiness assessment.