When: When is e-invoicing implemented in Malaysia?

Phased Rollout:

- 1 August 2024: Taxpayers with annual turnover/revenue > RM100 million.
- 1 January 2025: Taxpayers with annual turnover/revenue > RM25 million and ≤ RM100 million.
- 1 July 2025: Taxpayers with annual turnover/revenue > RM500k and ≤ RM25 million.
- 1 January 2026: All other taxpayers.

Determination of Annual Turnover/Revenue for e-Invoice Implementation

Taxpayers with Audited Financial Statements:
Annual turnover/revenue is based on the statement of comprehensive income in the audited financial statements for financial year 2022.
Taxpayers without Audited Financial Statements:
Annual revenue is based on the tax return for the year of assessment 2022.
Change in Accounting Year-End:
If the accounting year-end changed in 2022, turnover/revenue will be pro-rated to a 12-month period to determine the e-Invoice implementation date.

Key Points

The annual turnover/revenue for e-Invoice implementation is based on 2022 financial data (audited statements or tax returns).
Once the implementation timeline is determined, changes in turnover/revenue in subsequent years will not affect the taxpayer’s obligation to comply with the e-Invoice timeline.
Compliance is based on the issuance of e-Invoices. Taxpayers meeting the turnover/revenue thresholds must issue and submit e-Invoices for IRBM validation according to the timeline.
Invoices issued before the implementation date do not need to be converted into e-Invoices.
During the transition period, taxpayers may receive either normal receipts (if the supplier has not yet implemented e-Invoice) or validated e-Invoices.

Voluntary Participation and New Businesses

Taxpayers can voluntarily adopt e-Invoicing earlier, regardless of their turnover/revenue.
For businesses starting between 2023 and 2024, e-Invoice implementation is required by 1 July 2025 if annual turnover exceeds RM500,000, and by 1 January 2026 if turnover is up to RM500,000.
For businesses starting from 2025 onwards, e-Invoice implementation is required by 1 January 2026 or upon commencement of operations.

Interim Relaxation Period:

The Malaysian government has granted a 6-month relaxation period for different groups of taxpayers based on their annual turnover/revenue:

- Taxpayers with over RM100 million: 1 August 2024 to 31 January 2025.
- Taxpayers with RM25 million to RM100 million: 1 January 2025 to 30 June 2025.
- All other taxpayers: 1 July 2025 to 31 December 2025.

Flexibilities During the Relaxation Period:

During this period, taxpayers are allowed to:

Issue consolidated e-Invoices for all activities and transactions, including those listed in Section 3.7 of the e-Invoice Specific Guideline.
Issue consolidated self-billed e-Invoices for all self-billed circumstances outlined in Section 8.3.
Input any information in the “Description of Product or Service” field in the consolidated e-Invoice or self-billed e-Invoice, without being restricted to specific reference numbers.
Avoid issuing individual e-Invoices or individual self-billed e-Invoices, even if requested by buyers or suppliers, provided they comply with the above points.

No Prosecution During Relaxation Period:

The Inland Revenue Board of Malaysia (IRBM) will not take any prosecution action under Section 120 of the Income Tax Act 1967 for non-compliance with e-Invoice requirements during the relaxation period, as long as taxpayers adhere to the requirements mentioned in Section 16.2(a) and (b).

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