In 2025, Malaysia is poised to make significant advancements in the realm of e-invoicing, driven by technological innovations and evolving regulatory frameworks. For small and medium-sized businesses (SMBs) and accounting professionals in Malaysia, staying informed about these developments is crucial.
This blog explores the key e-invoicing trends and regulatory updates specific to Malaysia, providing insights to help businesses navigate this dynamic landscape.
There are a number of changes outlined by the IRBM (Inland Revenue Board of Malaysia) including mandatory e-invoicing requirements, real-time tax reporting, enhanced data security, digital identity verification and increased collaboration between tax authorities as outlined below.
Malaysia is moving towards mandatory e-invoicing to enhance tax compliance and streamline B2G (business-to-government) and B2B (business-to-business) transactions. As part of this change, businesses are required to send individual digital e-invoices to customers in the format specified by the IRBM (Inland revenue board of Malaysia). The dates to comply with these changes depend on the turnover of your business as demonstrated below. The IRBM has also introduced ‘relaxation phases’ to support the transition to e-invoicing.
| Targeted Taxpayers | Implementation Date |
|---|---|
| Taxpayers with an annual turnover or revenue of more than RM100 million | 1 August 2024 |
| Taxpayers with an annual turnover or revenue of more than RM25 million and up to RM100 million | 1 January 2025 |
| Taxpayers with an annual turnover or revenue of more than RM5 million and up to RM25 million | 1 July 2025 |
| Taxpayers with an annual turnover or revenue of more than RM1 million and up to RM5 million | 1 January 2026 |
| Taxpayers with an annual turnover or revenue of up to RM1 million | 1 July 2026 |
Note: e-Invoice implementation timeline was updated on 5 June 2025
The Inland Revenue Board of Malaysia (IRBM) has introduced a six-month relaxation period for businesses in each phase to ease the transition. During this time:
However, from 1 January 2026 onwards: For any transaction exceeding RM10,000: Businesses must issue an individual e-invoice. Consolidated e-invoices are not permitted for such transactions.
NOTE: This phased approach aims to facilitate a smooth transition towards e-invoicing, ensuring that businesses of all sizes can adapt effectively to these new compliance requirements.
Real-time tax reporting will become a critical requirement in Malaysia:
Instant validation: Tax authorities will implement systems for instant validation and approval of e-invoices, ensuring compliance and reducing the risk of fraud.
Automated tax calculation: e-Invoicing systems will automatically calculate applicable taxes, ensuring accurate reporting and minimising compliance errors.
Malaysia will introduce stricter data security and privacy regulations to protect sensitive invoicing information:
Advanced security measures: Businesses will be required to implement advanced security measures, including encryption, digital signatures, and secure access controls, to protect e-invoicing data.
Compliance with data protection laws: New regulations will ensure that businesses comply with data protection standards, safeguarding sensitive information during e-invoicing transactions.
To enhance the integrity of e-invoicing transactions, Malaysia will mandate digital identity verification:
Know Your Customer (KYC): Businesses will need to implement KYC processes to verify the identities of trading partners and customers before engaging in e-invoicing transactions.
Digital signature authentication: Digital signature authentication will be required to validate the authenticity of e-invoices and prevent unauthorised alterations.
Malaysian tax authorities will enhance collaboration with their counterparts in other countries to improve transparency and cross-border compliance:
Information sharing: Collaboration will involve sharing e-invoicing data and compliance information to detect and prevent tax evasion and fraud.
Harmonised regulations: Efforts will be made to harmonise e-invoicing regulations and reporting requirements, facilitating international trade and simplifying compliance for multinational businesses.
To stay ahead of these trends and regulatory updates, Malaysian businesses should consider the following strategies:
Adopt e-invoicing platforms that leverage AI, blockchain, and cloud technology to enhance efficiency, security, and compliance. Ensure that the solution is flexible and compatible with existing systems.
Implement robust security measures to protect e-invoicing data. Stay compliant with Malaysia's data protection regulations by adopting encryption, secure access controls, and regular security audits.
Keep up-to-date with regulatory changes and emerging trends. Regularly review and update e-invoicing practices to ensure compliance and take advantage of new technological advancements.
Provide ongoing training for employees to ensure they are proficient with new e-invoicing technologies and compliant with regulatory requirements. Foster a culture of adaptability and continuous learning.
Collaborate with trading partners, customers, and regulatory bodies to ensure seamless e-invoicing adoption. Share best practices and resources to support mutual readiness and compliance.
The e-invoicing landscape in Malaysia is set to undergo significant transformation by 2025, driven by technological advancements and evolving regulatory frameworks. For SMBs and accounting professionals, staying ahead of these developments is crucial to navigating complex challenges and reaping the full benefits of e-invoicing.
By investing in advanced e-invoicing solutions, prioritising data security, staying informed about regulatory updates, and fostering collaboration, Malaysian businesses can successfully transition to a more efficient, secure, and compliant invoicing process. As the digital economy continues to evolve, those who proactively embrace these trends and updates will be well-positioned to thrive in the future economy.
For further information surrounding key invoicing trends surrounding use of AI and machine learning, adoption of blockchain technology, and expansion of cloud based e-invoicing solutions click here.
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