How to Set Up e-Invoicing

Electronic invoicing (“e-invoicing”) is Malaysia’s new digital system for issuing, validating, submitting and storing invoices.  It operates through the MyInvois platform, which is managed by the Inland Revenue Board of Malaysia (IRBM)—locally known as Lembaga Hasil Dalam Negeri (LHDN).

Getting your e-invoicing right is important: if it’s not done correctly, invoices may be rejected as proof of income or expense, or you could face penalties. In this article, we’ll cover what the law requires, how to implement e-invoicing in practice and when you need to issue an e-invoice to stay compliant.

Key takeaways

• The e-invoice implementation timeline in Malaysia runs from 1 August 2024 to 1 July 2026, with deadlines based on business revenue.
• Each e-invoice implementation stage includes a six-month grace period to help businesses adapt.
• Businesses with annual revenue below RM500,000 are exempt, unless linked to larger groups or related entities—an important detail that’s easy to miss in the e-invoice LHDN implementation guidelines.
• e-Invoices must be issued for all sales, expenses and self-billed transactions, making it essential to understand how to implement e-invoicing correctly for all business dealings.
• Companies can choose from three options for e-invoice implementation: the MyInvois Portal, API/system integration or a Peppol Access Point.
• Every invoice follows the same process: generation, validation, notification, sharing, possible rejection/cancellation, and secure archiving.
• Validated e-invoices receive an Invoice Reference Number (IRN) and QR code, and must be stored for 7 years.
• For the latest e-invoice implementation dates and updates, always check the official LHDN e-invoice page.

e-Invoicing mandatory requirements 

In Malaysia, e-invoicing is being rolled out in stages by the Inland Revenue Board (LHDN/IRBM). These mandatory requirements apply to almost all businesses, with each implementation stage tied to annual revenue. The phased approach gives companies time to prepare and adjust before e-invoicing becomes fully compulsory.

You must comply with e-invoicing if your business falls into one of these groups:

• Companies with high annual revenue (large corporations and listed businesses).
• Small and medium enterprises (SMEs) once they reach the implementation stage set by LHDN.
• Sole proprietors and partnerships whose revenue exceeds the exemption threshold.
• Any business linked to a related company, joint venture, or shareholder group that collectively earns above the exemption limit.

For exact e-invoice implementation dates, see the timeline below or refer to the official LHDN e-invoice implementation page.

Exemption: Only businesses with annual revenue below RM500,000 may be exempt, provided they are not tied to larger entities.

Who qualifies for an exemption to e-invoicing?

Small businesses and individuals with annual revenue under RM500,000 generally qualify for the e-invoicing exemption. This applies across the board—whether you’re a sole proprietor, partnership, company, or cooperative.

But there are some important things to note. You won’t qualify for the exemption if:

• Your business has non-individual shareholders with revenue of RM500,000 or more.
• You are part of a group, related company, or joint venture whose combined revenue is RM500,000 or more.
• Even if your own revenue is below RM500,000, if you cross the threshold in the relevant prior Year of Assessment, the exemption may no longer apply.
• Your business is a subsidiary of a holding company with revenue of RM500,000 or more.
• Your business is linked to a related company or joint venture with revenue of RM500,000 or more.

Example:

GreenLeaf Cafe Sdn. Bhd. reported revenue of RM320,000 for 2022—well under the RM500,000 threshold. At first glance, this would put the cafe in the exemption group. However, GreenLeaf Cafe is part of a joint venture with FreshFoods Wholesale Sdn. Bhd., a business earning more than RM500,000 annually. Because of that relationship, GreenLeaf Cafe doesn’t qualify for the exemption and will need to start e-invoicing from 1 July 2026.

This is a fictional example for illustration only.

When does an e-invoice need to be issued?

e-Invoices are required for most business transactions to help the government track income and expenses accurately. Understanding when you need to issue an e-invoice is crucial for staying compliant and avoiding penalties.

You need to create an e-invoice in these situations:

• When you sell something: Every time you sell goods or services, you need an e-invoice to prove your income for tax purposes.
• When you buy something for business: When you spend money on business expenses, you need proper e-invoices to claim these costs on your taxes.
• Self-billed e-invoices:  In certain circumstances where you acquire goods or services from suppliers who don't use Malaysia's MyInvois System, you would be required to issue a self-billed e-invoice to document the expense.

For detailed guidance, refer to the IRBM’s e-invoice Specific Guidelines.

e-Invoicing implementation timeline in Malaysia

Malaysia’s e-invoice rollout is being introduced gradually, with deadlines based on business size. Each implementation stage has a different start date depending on your company’s annual revenue, giving you time to prepare. The table below shows when each group must begin issuing e-invoices:

To allow taxpayers to adjust to the new system, each phase has a relaxation period of six months, during which penalties are not enforced.

e-Invoicing phases 

Every e-invoice you issue goes through a standard life cycle in the MyInvois system. These phases ensure that each invoice is properly created, validated by LHDN (IRBM), shared with your customer, and stored for future reference. Understanding these steps will help you see how your invoice moves through the system—from the moment you create it to when it’s archived.

Phase 1: e-Invoice generation and submission

When you make a sale or need to adjust an existing invoice, you create an e-invoice and send it to the government system (IRBM) through your chosen method. This happens right after you complete the transaction.

Phase 2: e-Invoice validation by IRBM

The system automatically reviews your invoice in real-time to make sure everything is correct and complete. Once approved by this instant government check, you'll get a special reference number that proves your invoice is valid.

Phase 3: Notified confirmation 

Both you and your customer receive automatic notifications when the invoice is approved, so everyone stays in the loop.

Phase 4: e-Invoice sharing 

You'll need to send the approved invoice (which includes a special QR code) to your customer. They can scan this QR code anytime to verify the invoice is legitimate.

Phase 5: Rejection or cancellation 

If there are errors, either you or your customer can request to cancel or reject the invoice within 72 hours. Just provide a reason, and you can fix the problem.

Phase 6: Archiving and data retrieval in the MyInvois Portal

Cleared, rejected, or cancelled invoices are stored in MyInvois and must also be kept by businesses for 7 years. Both you and your customers can log in to the MyInvois Portal to access your records any time. You can look up past invoices or download copies for your records.

How to implement e-invoicing in 4 steps

Getting started with e-invoicing may sound technical, but the process is straightforward once you break it down. Whether you choose the MyInvois Portal, system integration or a Peppol Access Point, the setup follows the same basic path—register, prepare your data, and submit invoices for validation.

If you’re ever unsure about your deadlines for e-invoice implementation, you can always double-check the official LHDN e-invoice timeline to make sure your business is on track.

1. Confirm implementation tool

The first step is to decide how you’ll send e-Invoices to IRBM via MyInvois. You have three IRBM-approved methods:

• MyInvois Portal: Use this web portal for manual single invoice entry or batch upload (via spreadsheet)—good if you have low-volume or simple invoice workflows.
• API / Software Integration: If you have a billing or ERP system, you can integrate via the API/SDK provided by IRBM so that invoices are submitted automatically and in real time.
• Peppol Access Point (4-corner model): Connect to an international business network that lets you exchange invoices electronically with other businesses. This is great for companies that trade internationally or want seamless invoice sharing

2. Complete registration 

Before you can issue e-invoices, your business must be registered with LHDN and have an active tax profile. You’ll also need to ensure your chosen service provider is approved in Malaysia. Here’s how to complete your registration:

• Ensure your business is registered with IRBM / LHDN and your tax profile is active.
• Obtain/activate a digital certificate (issued or recognised under IRBM’s scheme) for signing e-Invoices.
• If using API, you may need to use the SDK, or ensure your software provider is certified / compliant.

3. Prepare mandatory data fields and system setup

Before you can issue e-invoices, you’ll need to make sure your system (or the MyInvois Portal) is set up to capture all the required details. IRBM has a standard list of information that every e-invoice must include:

• Business details: Supplier and buyer names, business registration numbers, and Tax Identification Numbers (TIN).
• Addresses and contact information: Billing and business addresses, email, or phone where needed.
• Invoice information: Invoice number, invoice date, due date, and purchase order number if applicable.
• Transaction details: Description of goods or services, quantity, unit price, discounts, total before tax, tax amount, total after tax.
• Currency details: If you invoice in another currency, you may need to include the exchange rate.
• Archiving system: All e-invoices (approved, cancelled, or rejected) must be stored securely for 7 years for audit purposes.

A note on formats (JSON/XML):

If you’re using the MyInvois Portal, you won’t need to worry about formats—the portal handles that for you. If you’re using accounting software like QuickBooks, the system will automatically send the data in the correct format (JSON or XML) to IRBM. So while you might see these terms mentioned in guidelines, you don’t need to do anything extra—your software or service provider takes care of it.

4. Submit through the MyInvois Portal 

Once you’ve gathered your invoice data, you’re ready to create and submit your e-invoice. The MyInvois Portal gives you two options—submitting invoices one by one, or uploading them in bulk.

Log in to the portal

• Go to the MyInvois Portal. You can always find this link via the official LHDN e-Invoice page.
• Log in using your Trade Register Number (TIN) and your registered password.

Choose your submission method

• Single submission: Best for small businesses or if you only issue a few invoices. You can enter all required details directly into the portal’s online form and submit in real time.
• Batch submission: Suitable if you have multiple invoices to send at once. You can upload a file in the format provided by LHDN (CSV/Excel template) and submit them together.

Validation and approval

• After submission, the portal runs an instant validation check.
• If successful, IRBM issues an Invoice Reference Number (IRN) and a QR code.
• Both you and your buyer will receive confirmation.

Let QuickBooks help you with e-invoicing 

Adapting to e-invoice implementation in Malaysia doesn’t need to be overwhelming. With QuickBooks, you can stay compliant while saving time and effort. Our software is designed to handle the technical details so you can focus on your customers and your business.

Here’s how QuickBooks can help:

• Captures all mandatory e-invoice fields automatically
• Connects directly with the MyInvois system through API integration
• Stores invoices securely for the required seven years
• Provides clear dashboards so you can track validation, approvals, and rejections in real time

Whether you’re just starting out or handling hundreds of invoices, QuickBooks helps you stay compliant while saving time.

Government resources for Malaysian businesses

While QuickBooks can help you stay on top of e-invoice implementation, it’s important to always check the official guidance from LHDN (IRBM). Regulations and timelines may change, and the following resources will give you the most up-to-date information straight from the source:

• Check the IRBM / LHDN e-Invoice Implementation Timeline 
• Download the IRBM e-Invoice Guideline (PDF) 
• Download the LHDN General e-Invoice FAQs (PDF) 
• Get access to the MyInvois Portal