Malaysia’s e-invoicing mandate
How to prepare
The Inland Revenue Board of Malaysia (IRBM) announced in March 2023 that all businesses registered in Malaysia will be required to generate e-Invoices for all Business to Business (B2B), Business to Consumer (B2C) and Business to Government (B2G) transactions.
This initiative is part of a broader effort by the Malaysian government to modernise its tax administration system and simplify compliance for businesses.
The first phase of the e-Invoicing requirement in Malaysia started in August 2024, and it will eventually be mandatory for all companies with an annual turnover exceeding RM150,000 to register for the e-Invoice process with the IRBM. The implementation date will depend upon the turnover of the business and will be scheduled as per the below table
| Targeted taxpayers | Implementation date |
| Taxpayers with an annual turnover or revenue of more than RM100 million | 1 August 2024 |
| Taxpayers with an annual turnover of more than RM25 million and up to RM100 million | 1 January 2025 |
| All taxpayers (revenue exceeding RM150,000 per year) | 1 July 2025 |
*Revenue will be based on the amount reported for the 2022 financial year.
e-Invoices must be submitted to the IRBM using the UBL 2.1 format (either XML or JSON) through the ‘MyInvois’ portal (Hosted by IRBM) or via direct Application Programming Interface (API) integration. The system will be used for validation of e-Invoices issued by the company or receipt of e-Invoices from suppliers, vendors, and landlord (company’s expenses). The legislation will include any invoices issued to foreign customers, including any Intercompany (cost-plus) invoices. In relation to the acquisition of services from foreign suppliers, the Malaysian buyer will be required to issue a self-billed e-Invoice.
An e-Invoice is a digital record of a transaction between a supplier and buyer which goes through the government portal in real-time for validation and recordkeeping. The Malaysian e-Invoice contains 55 fields with details of the transactions such as supplier and buyer details, item description, quantity, price, tax, total amount, payment details, etc. Successfully generated and validated e-invoices would have a Unique Identification Number (UIN) and QR Code which is generated by the “MyInvois” Portal, enabling online validation of the invoice.
The key objective of introducing e-invoicing by the Malaysian authorities is to boost the digital economy and improve tax administration. It aims to create a more transparent, efficient, and secure invoicing ecosystem while aligning the nation with global best practices.
The key benefits include:
- Unified invoicing: Streamlines creation and submission of invoices, automating data entry.
- Integrated tax filing: Ensures efficient and accurate tax reporting.
- Streamlined operations: Increases efficiency and saves resources on tax compliance.
- Improved cashflow: Reduces billing errors, speeds up payment cycles, and minimises disputes.
- Digitised reporting: Aligns financial reporting with digital standards.
- Paperless invoicing: Eliminates paper use and prevents tax leakage.
- Ease of trade: Simplifies operations for international trade businesses.
Don’t wait until the last minute to adapt to Malaysia’s e-invoicing requirements. Start preparing your business today to ensure compliance. Evaluate your current invoicing processes, explore digital solutions, and train your team to embrace this transformation seamlessly.
If you need guidance, then get in touch with Richard Austin for more information.
