IRBM e-Invoice Guidelines (Version 4.5)

The IRBM has introduced the e-invoice system to modernise tax compliance and improve business efficiencies. 

They have created guidelines that outlines the requirements, processes, timelines, and technical aspects of implementing e-invoicing in Malaysia.

1. Introduction to e-invoicing

An e-invoice is a digital invoice generated and sent through a centralised platform managed by IRBM. It aims to enhance tax administration by automating the process of issuing, receiving, and validating invoices between suppliers and buyers.

Key objectives:

• Streamline tax reporting for businesses
• Reduce fraud and improve tax compliance
• Support digital transformation initiatives in Malaysia

2. Implementation timeline

The e-invoicing requirements will be phased in based on annual turnover thresholds:

Current relaxation period for e-invoice implementation

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:

• Businesses can issue consolidated e-invoices for all transactions, including B2B transactions.
• More flexible product/service descriptions are permitted.
• No penalties will be imposed under Section 120 of the Income Tax Act 1967 for non-compliance. 

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.

3. Scope of e-Invoice requirements

Who must issue e-invoices?

All business taxpayers in Malaysia that fall within the annual turnover thresholds must issue e-invoices for B2B (business to business) and B2G (business to government) transactions.

Exemptions from e-invoicing:

Certain taxpayers and income types are exempt from e-invoice obligations:

• Individuals not conducting business
• Foreign diplomatic offices
• Government agencies
• Employment income, pensions, and alimony

4. e-Invoicing models available

The IRBM provides two methods for issuing and submitting e-invoices:

1. MyInvois Portal:

A web-based platform provided by IRBM where businesses can generate, submit, view, cancel, or reject e-invoices.

2. API integrations:

Suitable for large enterprises with high transaction volumes. It allows businesses to integrate their internal systems directly with the IRBM platform for automated e-invoice submission.

5. e-Invoicing workflows and validation process

The workflow for e-invoices involves three main stages:

1. Submission:

The supplier submits the e-invoice to IRBM.

2. Validation:

IRBM validates the invoice to ensure compliance with data requirements. If the invoice is valid, a unique Document Identification Number (DIN) is issued.

3. Notification:

Both the supplier and buyer receive notifications once the invoice is validated. The supplier must then share the validated e-invoice or its visual representation with the buyer.

6. Data requirements for e-invoices

To comply with IRBM guidelines, e-invoices must include the following mandatory data fields:

The IRBM guideline includes a detailed list of the required data fields and formats.

7. Invoice rejection and cancellation

Businesses can cancel or reject an e-invoice within 72 hours if they identify errors. After this period, the invoice is considered final and must be corrected through credit notes or debit notes.

8. Data security and confidentiality

The IRBM emphasises the importance of data security in the e-invoice process. Measures have been implemented to ensure privacy protection for taxpayer information. The system follows data encryption standards to prevent unauthorised access.

9. Benefits of e-invoice implementation

The e-invoice system provides numerous benefits for businesses:

Operational benefits:

• Reduces manual errors by automating the invoicing process.
• Streamlines business operations by eliminating the need for paper invoices.
• Lowers costs associated with invoice printing, postage, and storage.

Tax compliance benefits:

• Ensures accurate tax reporting through real-time invoice validation.
• Helps businesses comply with tax laws more efficiently.
• Reduces the risk of audit discrepancies.

10. Transition to e-invoicing systems

What businesses need to do:

• Register for the MyInvois Portal or API integration with IRBM.
• Test the system to ensure compliance before the mandatory dates.
• Train staff to handle the new invoicing process.

11. Penalties for non-compliance

As of July 9, 2025, the IRBM has stated that failure to issue e-invoice is an offence under Section 120(1)(d) of the Income Tax Act 1967 and will result in a fine of not less than RM200 and not more than RM20,000 or imprisonment not exceeding 6 months or both, for each non-compliance. As a result, businesses are encouraged to comply early to avoid potential fines and tax disputes.

Key takeaways

• The e-invoice system is mandatory in Malaysia starting August 2024 with a phased implementation.
• Businesses must submit invoices to the IRBM for validation before sending them to buyers.
• The system offers two models for invoice submission:
• MyInvois Portal
• API integration
• Businesses have 72 hours to correct any errors in an e-Invoice.
• The e-invoice system aims to improve tax compliance, reduce fraud, and streamline operations for businesses.