101 Comprehensive Guide to e-Invoicing in Malaysia

Key insights and updates

7/7/20242 min read

worm's-eye view photography of concrete building
worm's-eye view photography of concrete building

Following the announcement by the Inland Revenue Board of Malaysia (IRBM) in May 2023 regarding the rollout of e-Invoicing in 2024, the IRBM has recently updated its guidelines and software development kit (SDK) on 6 April 2024. This update includes e-Invoice Guidelines (Version 2.3), Specific Guidelines (Version 2.1), and SDK (Version 1.0), all of which are now accessible on their official website.

The adoption of e-Invoicing aims to bolster Malaysia’s digital economy and streamline tax administration processes. By replacing traditional paper-based invoices, e-Invoicing is expected to improve the efficiency of financial transaction recording and enable real-time data collection.

In line with efforts to support digital economy growth, the Government plans to implement e-Invoicing gradually, enhancing the overall management efficiency of Malaysia’s tax administration.

An e-Invoice serves as a digital record of a transaction between a supplier and a buyer, eliminating the need for paper invoices. It enables businesses to generate and store machine-readable, digitized versions of invoices, simplifying billing and payment processes. e-Invoices adhere to IRBM’s specified formats such as XML or JSON and include 55 fields, with 37 fields being mandatory.

What is e-invoice?

The implementation timeline for e-Invoicing in Malaysia is as follows:

- From 1st August 2024: Applicable to taxpayers with an annual turnover or revenue exceeding RM100 million.

- From 1st January 2025: Extends to taxpayers with annual turnovers or revenues ranging from more than RM25 million to RM100 million.

- By 1st July 2025: e-Invoicing becomes mandatory for all taxpayers in Malaysia, regardless of their annual turnover or revenue.

This phased approach ensures a gradual adoption of e-Invoicing across different segments of businesses in Malaysia.

When is the e-Invoicing Implementation Timeline in Malaysia scheduled?
What are e-Invoicing Transaction Types?

e-Invoicing applies to all taxpayers engaged in commercial activities in Malaysia. It enables instant validation and storage of transactions across Business-to-Business (B2B), Business-to-Consumer (B2C), and Business-to-Government (B2G) interactions. Additionally, it extends to specific non-business transactions between individuals.

In certain B2C transactions where end consumers do not require e-Invoices for tax-related purposes, suppliers retain the option to issue standard receipts or invoices based on existing practices.

Overview of e-Invoicing for Transactions with Buyers

Below is an overview of the process for Buyers who do and don’t require e-Invoices.