Malaysia Postpones E-Invoice Mandate for SMEs Amid Rising Concerns – 5 June 2025
KUALA LUMPUR – In response to industry feedback, the Ministry of Finance has announced updates to Malaysia’s mandatory e-invoicing rollout. Businesses with annual revenue below RM5 million will benefit from a revised implementation timeline, including new exemption thresholds and a six-month grace period for each rollout phase.
The changes are part of the government’s strategy to ease the compliance burden for Micro, Small, and Medium Enterprises (MSMEs) as Malaysia advances its digital tax agenda through the MyInvois system launched in 2023.
“The government acknowledges the commitment of taxpayers, particularly businesses in the micro, small, and medium enterprises (MSME) category, in complying with the legal requirements of e-invoicing.”
“It recognises the need for sufficient preparation time and the operational challenges faced in implementing the system.” – LHDN statement
Updated E-invoicing Implementation Timeline
| Phase | Revenue Bracket (Annual Sales) | New Deadline | Previous Deadline | Who's Affected | Required Action | Additional Notes |
|---|---|---|---|---|---|---|
| Phase III | RM5 million - RM25 million | 1 July 2025 | (No Change) | Established SMEs and mid-tier companies | Must fully adopt e-invoicing via MyInvoice Portal or API integration | Final preparations should be underway. No extension granted. |
| Phase IV | RM1 million - RM5 million | 1 January 2026 | 1 July 2025 | Growing SMEs | Begin onboarding, software testing, and employee training. | Deadline extended by 6 months to give more time for system and operational readiness |
| Phase V | RM500,000 – RM1 million | 1 July 2026 | (New phase announced) | Small businesses and freelancers | Assess readiness, consider using simplified software or MyInvois | First time this bracket has been officially scheduled in the timeline. |
| Exempted | Below RM500,000 | Temporarily Exempted | Previously RM150,000 | Micro enterprises, informal businesses | Micro enterprises, informal businesses Not mandatory; may issue consolidated e-invoices if required | Buyer may request a consolidated e-invoice. Single invoices not required per transaction. |
What’s Changing?
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- Phase IV (RM1M–RM5M) deferred to 1 January 2026.
- Phase V (RM500K–RM1M) added, begins 1 July 2026.
- Threshold for exemption raised from RM150K to RM500K.
- Grace period allows consolidated e-invoices for all transactions.
“If a buyer requests an e-invoice, the seller may issue only a consolidated e-invoice, without having to issue one for each individual transaction.” – LHDN
Grace Period & Enforcement
To ease enforcement, LHDN has introduced a six-month grace period following each phase’s effective date. During this period: no prosecution under Section 120 of the Income Tax Act 1967 provided:
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- Businesses issue consolidated invoices.
- Reasonable efforts are made to comply.
Beginning 1 January 2026, individual e-invoices are mandatory for transactions exceeding RM10,000. Consolidated formats will no longer be accepted for high-value sales.
This aims to improve transparency in large transactions, facilitate better data tracking and audit readiness and reduce underreporting risks in B2B and B2G transactions.
“We appreciate the government listening to SME concerns. However, more hands-on technical guidance is needed.” – SAMENTA statement
What You Should Do Now?
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- Identify your phase based on annual revenue.
- Choose between MyInvois or API integration
- Train staff and update workflows.
- Register for LHDN webinars.
Download official guidelines (through MyInvois portal):
“These exemptions are not only timely but also reflect an understanding of the real challenges faced by small businesses on the ground.” – Datuk William Ng, National President of SAMENTA
The Estimated impact is over 1 million SMEs fall within the RM150K–RM5M bracket and are affected by the updated rollout.
Read more articles here:
Govt Revises e-invoicing deadlines for businesses earning below RM5mil – Free Malaysia Today
E-invoicing deadlines for businesses with revenue below RM5mil revised, says LHDN – The Star
Final Takeaway
Malaysia’s updated e-invoicing plan signals a balanced approach to nationwide digital compliance. While easing the pressure on MSMEs, the government is also firm on its direction. Businesses should use this extension to implement solutions, test their systems, and ensure readiness by 2026.
Support & Resources (E-Invoicing Malaysia)
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- LHDN E-Invoice Hotline: 03-8911 1000
- Email Support: e-invoice@hasil.gov.my
- Guidelines & Training: hasil.gov.my/e-invoice
- Customer Service: https://feedback.myinvois.hasil.gov.my
