E-Invoicing in Malaysia: What SMEs Need to Do Before July 2025

Malaysia is moving toward mandatory e-Invoicing as part of its digital tax administration reform. By 1 July 2025, all small and medium enterprises (SMEs) are expected to comply with the e-Invoicing requirements introduced by Lembaga Hasil Dalam Negeri (LHDN).

E-Invoicing in Malaysia

What is E-Invoicing?

E-Invoicing is a digital method for generating, transmitting, and storing invoices in a structured electronic format. Unlike a traditional PDF invoice or physical copy, an e-Invoice must be submitted to LHDN’s MyInvois system for validation. Once validated, it will be returned with a Unique Identifier (UUID) and QR code embedded — making it a legally recognized invoice under the new framework.

Implementation Timeline

The rollout of e-Invoicing in Malaysia is being done in phases, based on business turnover:

Annual Turnover (FY2022)	Effective Date
RM100 million and above	1 August 2024
RM25 million to < RM100 million	1 January 2025
Below RM25 million (SMEs)	1 July 2025

Businesses with turnover below RM25 million will be required to adopt e-Invoicing by July 2025.

Steps SMEs Should Take Before July 2025

1. Review Current Invoicing Processes

Examine how invoices are currently issued, stored, and shared. Identify areas that need adjustment to meet the structured format and validation steps under the new e-Invoicing system.

2. Choose a Suitable Submission Method

There are two main methods to issue e-Invoices:

• MyInvois Portal: For manual submission, suitable for businesses with low invoice volume.

• API Integration: For integration with accounting or ERP software. This is ideal for businesses with high transaction volumes or those using digital systems.

3. Update or Upgrade Accounting Software

Ensure your accounting or invoicing software is capable of:

• Generating e-Invoices in the required format.

• Connecting to the MyInvois system (if using API).

• Handling common use cases such as cancellations, refunds, and credit notes in line with LHDN requirements.

4. Prepare Accurate Customer and Supplier Data

LHDN requires complete and valid customer/supplier details for e-Invoicing. This includes:

• Company name

• Tax Identification Number (TIN)

• Business registration number (if applicable)

• Contact information

Review and update your records to avoid submission issues.

5. Understand Compliance and Record-Keeping Requirements

All validated invoices must be retained in accordance with tax record requirements. Businesses must also be ready to handle corrections, cancellations, and other variations through the e-Invoicing system.

6. Staff Training and Internal Readiness

Employees involved in sales, finance, or procurement should be familiar with the new process, including how to issue e-Invoices, monitor validation statuses, and manage customer communication.

7. Monitor Updates from LHDN

Stay informed by referring to:

• Official e-Invoicing guidelines on the LHDN website

• Announcements from your accounting software provider

• Updates from professional bodies such as MIA, CTIM, or MDEC

Conclusion

The transition to e-Invoicing will become mandatory for SMEs in Malaysia by 1 July 2025. Businesses are advised to begin reviewing their processes, systems, and data to ensure compliance. Early preparation can help avoid disruption when the new system goes live.