What is an e-Invoice in Malaysia?

An e-Invoice is an invoice that LHDN checks and approves before it counts as a real invoice. You send the invoice details to LHDN's MyInvois system, LHDN validates them, and sends back a unique identifier number and a QR code. Only then can you give the invoice to your customer.

The important word is validated. A PDF you made in Excel is not an e-Invoice, no matter how it looks. An invoice that never went through MyInvois is not valid proof of income or expenses for tax purposes.

LHDN is the Inland Revenue Board of Malaysia — Lembaga Hasil Dalam Negeri, also written HASiL. MyInvois is the free government portal it built for this. You can also connect your own accounting or e-Invoicing software to MyInvois through an API so the whole thing happens in the background.

Is an e-Invoice required for your business?

Start with one number: your annual revenue or sales. That decides almost everything.

The RM3 million exemption — and why the phase table still says RM5 million

This is the part almost every guide online still gets wrong, so it is worth being precise.

On 25 August 2026, the Prime Minister announced in the National Day address that the e-Invoice threshold would rise. LHDN confirmed it on 30 August 2026 and said more than 1.1 million businesses would fall out of the mandate. It took effect on 1 September 2026. The Edge Malaysia · 30 Aug 2026

It is now written into LHDN's own rulebook. Section 1.6.1(e) of the e-Invoice Guideline lists, among those exempt from issuing e-Invoices, "taxpayers with annual income or annual sales of less than RM3,000,000". Guideline v4.8 · s.1.6.1(e)

This threshold has moved three times in twelve months — from RM150,000 to RM500,000, then to RM1 million, now to RM3 million. LHDN says outright that the exemptions "will be reviewed and updated from time to time". Guideline v4.8 · s.1.6.8 Treat today's exemption as current, not permanent.

When does the RM3 million exemption not apply?

This is the trap. The exemption covers every category of taxpayer — individuals, partnerships, companies, co-operatives — but LHDN removes it in three situations. Your own turnover can be tiny and you can still be required to issue e-Invoices.

The exemption does not apply if:

• you have a non-individual shareholder (or equivalent) whose annual income or sales is at least RM3 million; or
• you are a subsidiary of a holding company whose annual income or sales is at least RM3 million; or
• you have a related company or joint venture whose annual income or sales is at least RM3 million.

Guideline v4.8 · s.1.6.10 "Related company" takes the meaning given in section 2 of the Promotion of Investments Act 1986.

When did e-Invoicing become mandatory? The full timeline

Mandatory e-Invoicing was rolled out in phases, largest businesses first. This is the official table, straight from the current guideline.

Guideline v4.8 · Table 1.1 The "in practice" note in Phase 4 is our reading of Table 1.1 together with s.1.6.1(e) — LHDN has not rewritten the table.

What about a new business?

• Started between 2023 and 2025 with annual revenue of at least RM3 million → your date was 1 July 2026.
• Starting from 2026 onwards → 1 July 2026, or the date you begin operating.
• But if your first-year revenue is under RM3 million, you start on 1 January of the second year after the year your revenue reaches RM3 million.

Guideline v4.8 · s.1.5 You can also start voluntarily at any time, whatever your revenue.

Who else is exempt? When e-Invoice is not applicable

e-Invoice applicable to whom?

e-Invoicing is applicable to taxpayers carrying on commercial activity in Malaysia, and it covers business-to-business, business-to-consumer and business-to-government sales. Beyond the revenue threshold, LHDN exempts these from issuing e-Invoices (including self-billed e-Invoices):

• Foreign diplomatic offices.
• Individuals who are not carrying on a business.
• Statutory bodies, statutory authorities and local authorities — for collecting payments, fees, charges, statutory levies, summonses, compounds and penalties under any written law; and for sales made before 1 July 2025.
• International organisations — for sales made before 1 July 2025.
• Taxpayers with annual revenue under RM3 million, subject to the group carve-outs above.

Guideline v4.8 · s.1.6.1 Statutory bodies, authorities and international organisations have had to issue e-Invoices for sales of goods and services since 1 July 2025.

Some transactions are also outside the system — internal transfers within the same company, refundable deposits, and employment income such as salary under a contract of service. Transaction-level exclusions are detailed and industry specific — check the current Specific Guideline for your own activity.

You're exempt. Here's what still applies to you

If you are under RM3 million with no group complications, the honest answer is: you do not need e-Invoicing software, and you should not let anyone sell you one on the basis that it is compulsory. It is not, for you, today.

Four things still affect you.

1. You will still receive e-Invoices. Your larger suppliers are in the mandate. Their invoices to you will arrive validated, with a QR code, and your own details on them must be correct — so keep your TIN and business registration number handy and accurate.
2. Business customers may ask you for one anyway. A company that needs a validated e-Invoice as proof of expense may prefer suppliers who can issue one. Being exempt is not the same as being convenient to buy from.
3. The threshold moves. It has changed three times in twelve months, and LHDN says it reviews exemptions from time to time. Growing past RM3 million puts you in scope.
4. You can join voluntarily. Any taxpayer may start early, regardless of revenue. Worth it only if your customers want it or your accounting software does it for you without extra work — not as insurance against a rule that does not apply to you.

What information is mandatory on an e-Invoice?

An e-Invoice is not a document you design. It is a fixed set of data fields sent to LHDN in a structured format — XML or JSON, not PDF. The current guideline lists 55 data fields. Guideline v4.8 · Appendix 1

Not all 55 are compulsory on every invoice. Each field is marked required, optional, or mandatory where applicable — the currency exchange rate, for example, is only mandatory when you invoice in something other than Ringgit, and tax exemption details only when an exemption applies. A separate set of attachment fields applies to imports and exports.

e-Invoice information: the eight field groups

Two practical points the field list does not make obvious:

• Buyer details are your problem, not your customer's. You need a correct TIN and business registration number for every business customer. Most of the pain in an e-Invoice rollout is cleaning up a customer master file, not the software.
• Business registration numbers must be in the current SSM format. LHDN requires taxpayers registered with the Companies Commission of Malaysia (SSM) to enter the new 12-character business registration number. For taxpayers with no registration number, LHDN may assign an identifier. Guideline v4.8 · Appendix 1, field 4

Every validated document comes back with a unique identifier number and a QR code, and must be digitally signed using the issuer's digital certificate — or the service provider's, if you submit through one.

How does the e-Invoicing process work?

The same five steps apply whether you type into the free portal or your software does it automatically.

1. You make a sale and create the invoice In your accounting or billing system, as you do today.
2. The invoice data goes to MyInvois As structured XML or JSON — either typed into the MyInvois Portal, uploaded as a batch spreadsheet, or sent straight from your system through the API.
3. LHDN validates it in near real time It checks the fields, the parties and the tax details. If something is wrong, it is rejected and you fix and resubmit.
4. You get a unique identifier number and QR code This is what makes it a valid e-Invoice. It is stored in LHDN's database.
5. You share the validated e-Invoice with your buyer With the QR code on it. The buyer may request rejection, and the seller may cancel, within 72 hours of validation. After that window closes, corrections need a new document — a credit note, debit note or refund note. Guideline v4.8 · s.2.3.6

There are two ways to connect. The MyInvois Portal is free and works for low volumes, but someone has to key or upload every invoice. The API route sends invoices straight from the system you already use, which is the only sensible option once volume climbs or you have multiple branches. That is what an integration into your existing system is for.

Is an e-Invoice required for B2B and B2C sales?

e-Invoice B2B: yes, every single sale

Every business-to-business sale needs its own individual e-Invoice with full buyer details. B2B transactions cannot be bundled into a consolidated one. Your buyer needs the validated document as proof of expense, so there is no shortcut here.

e-Invoice B2C: usually, but you can consolidate

For retail and other consumer sales, issuing an e-Invoice for every small transaction would be unworkable. So LHDN allows a consolidated e-Invoice — one submission grouping many low-value sales where the customer did not ask for an e-Invoice. It must be submitted to LHDN within 7 calendar days after the end of that month. Specific Guideline v4.9 · s.3.6.2 The same deadline applies to consolidated self-billed e-Invoices.

Self-billed e-Invoices: when the buyer issues it

Sometimes your supplier cannot issue an e-Invoice — so you have to issue one to yourself. This is a self-billed e-Invoice, and it is mandatory in defined situations: buying from foreign suppliers, payments to agents, dealers or distributors, profit distributions, e-commerce settlements, and interest payouts.

It catches people out because it is an obligation on the buyer. If you import goods or services, this one applies to you even though you are the customer.

What happens if you don't issue an e-Invoice?

Failing to issue an e-Invoice when required is an offence under section 120(1)(d) of the Income Tax Act 1967. On conviction the penalty is a fine of RM200 to RM20,000, imprisonment for up to six months, or both. LHDN · Non-Compliance and Offences The penalty attaches to the offence, so a pattern of missing invoices is not a single lapse.

There is a second, quieter cost: an invoice that never went through MyInvois is not valid proof of income or expense for tax purposes. That is a problem for your customer as much as for you.

The interim relaxation period

LHDN gave each phase a penalty-free settling-in window. Phase 4's has been extended twice and now runs until 31 December 2027, with full enforcement from 1 January 2028.

During that window a business may consolidate all transactions — including the industries normally blocked from consolidating — use consolidated self-billed e-Invoices, and enter general text in the product description field. It does not have to issue an individual e-Invoice even when a buyer asks for one, as long as it meets those conditions. LHDN has said it will not bring prosecution under section 120 during the relaxation period for businesses that do. Specific Guideline v4.9 · s.16.1–16.3

The relaxation is about penalties, not about the obligation. If you are in scope, you are legally required to issue e-Invoices now. The RM10,000 rule is not suspended.

Missed your deadline? The e-Invoice voluntary disclosure programme

This is the part almost nobody is writing about, and it is the most useful thing on this page if you are behind.

LHDN is running an e-Invoice Special Voluntary Disclosure Programme (Program Khas Pengakuan Sukarela e-Invois) from 7 July 2026 to 31 December 2027. It lets a business that missed or botched its e-Invoices put things right. Specific Guideline v4.9 · s.17

It covers taxpayers who:

• did not submit, or failed to submit, e-Invoices for any period since their mandatory start date;
• submitted e-Invoices that contain errors or information that does not meet the specifications;
• have submitted no e-Invoices at all for any period or transaction since their start date; or
• have been notified of an e-Invoice compliance review visit, or are already under compliance review.

Two practical rules if you use it. Back-dated consolidated e-Invoices must be submitted month by month — you cannot lump four missed months into one submission. And any single transaction above RM10,000 in those months still needs its own individual e-Invoice.

The programme has its own submission requirements and e-Invoice version rules, and submissions made under it cannot be used for anything else. Confirm the current procedure with LHDN or your tax agent before you file under it.

Frequently asked questions