The Malaysian government is gradually introducing e-invoicing requirements as part of its efforts to enhance tax compliance and digitize the country’s financial ecosystem. This guide provides a thorough overview of the e-invoicing implementation process, focusing on businesses with annual revenues exceeding RM150,000.
What is e-invoicing Malaysia?
e-invoicing is the process of electronically issuing and managing invoices through a standardized e-invoice system. This initiative allows businesses to submit invoices directly to the Inland Revenue Board of Malaysia (LHDN) in real-time. The move aims to reduce tax evasion, streamline compliance, and increase transparency in commercial transactions.
When Do Businesses Need to Implement e-invoicing Malaysia?
LHDN e-invoice Implementation Timeline Based on Revenue
The timeline for mandatory e-invoice implementation depends on a business’s annual revenue. The schedule is as follows:
| Annual Revenue (RM) | Implementation Date |
| >100 million | 1 August 2024 |
| 25-100 million | 1 January 2025 |
| <25 million | 1 July 2025 |
| <150,000 | Exempted (Updated 16 July 2024) |
Important Note: Businesses with annual revenues below RM150,000 are exempt from e-invoicing Malaysia. This e-invoicing exemption aims to ease the burden on micro-enterprises and smaller businesses.
When Exactly Businesses in Malaysia with Revenue > RM150k in 2024 Start e-invoicing?
- For new businesses starting in 2024:
- If their annual revenue exceeds RM150,000, they must begin e-invoicing on 1 January of the following year after the next year.
- Example: A business starting in 2024 and exceeding RM150,000 in revenue must start e-invoicing on 1 January 2026.
- Timeline Summary:
- 2024: Revenue surpasses RM150,000 between January and October.
- 2025: E-invoicing is not required yet.
- 2026: E-invoicing becomes mandatory starting from 1 January 2026.
Determining Revenue Thresholds for LHDN e-invoice Implementation
How to Assess Whether Your Business Exceeds RM150,000
The method for determining annual revenue depends on the business structure:
- Companies (Sdn Bhd, Bhd):
- Revenue is verified using audited financial statements.
- Other Entities (Sole Proprietors, Partnerships, etc.):
- Revenue is determined using management accounts or tax return forms.
If a business has changed its financial year, revenue is calculated based on the average monthly revenue, extrapolated to 12 months. For example:
- A company with 18 months of revenue totaling RM36 million would divide the total by 18 months, then multiply by 12 months, resulting in an annualized revenue of RM24 million.
Key LHDN e-invoice Implementation Rules
1. Post-Threshold e-invoicing Implementation Timeline
If a business exceeds RM150,000 in annual revenue, it must start e-invoicing on 1 January of the year after the following year. For instance:
- A business surpassing RM150,000 in 2024 will begin e-invoicing on 1 January 2026.
2. Continuation Requirement
Once a business begins e-invoicing, it must continue to do so, even if its revenue drops below RM150,000 in subsequent years. There are no “U-turns” allowed once implementation begins.
Examples to Illustrate the e-invoicing Malaysia Rules
Scenario: A New Business in 2024
- 2024 Revenue: RM160,000 (exceeds RM150,000 threshold).
- Implementation Start Date: 1 January 2026.
Scenario: A Drop in Revenue
A business surpasses RM150,000 in 2025 and is required to implement e-invoicing from 1 January 2027. Even if its revenue falls below RM150,000 in 2026 or subsequent years, it must continue e-invoicing.
Supply Chain Considerations for e-invoicing Malaysia
During the phased implementation, businesses that have started e-invoicing can still accept traditional invoices from suppliers who are not yet required to comply. Regular invoices will remain deductible for tax purposes until 1 July 2025, when full nationwide e-invoice compliance becomes mandatory.
Frequently Asked Questions (FAQs) about e-invoicing Malaysia
1. What Happens If I Exceed RM150,000?
If your business surpasses RM150,000 in annual revenue, you will need to implement e-invoicing starting on 1 January of the year after the following year. Once started, you cannot stop e-invoicing, regardless of future revenue levels.
2. How Do I Calculate My Revenue?
- Companies: Use audited financial statements.
- Sole Proprietors/Partnerships: Use management accounts or tax return forms.
3. What If My Supplier Has Not Implemented e-invoicing Yet?
Until 1 July 2025, traditional invoices are still acceptable for tax deduction purposes. After this date, all businesses must comply with e-invoicing requirements.
4. Are Small Businesses Exempt?
Yes, businesses with annual revenues below RM150,000 are exempt from implementing e-invoicing. This was confirmed on 16 July 2024 by the LHDN.
Stay Compliant with LHDN e-invoice Start Date Guidelines
The introduction of e-invoicing marks a significant step toward modernizing Malaysia’s tax and financial systems. For businesses, understanding and adhering to the new requirements is crucial to ensure smooth operations and compliance. If you’re unsure about how e-invoicing applies to your business, consult with financial professionals or refer to official LHDN guidelines for further clarification.
By staying informed and preparing in advance, businesses can successfully transition to e-invoicing and take full advantage of its benefits, including improved efficiency, transparency, and tax compliance.
Need Help to Implement e-invoice? Explore the Best e-invoicing Software Malaysia – JomeInvoice
JomeInvoice Top 3 Best e-invoicing Software Malaysia
When it comes to integrating best e-invoicing software solutions for both small and large enterprise Malaysia, JomeInvoice has quickly become a standout choice, positioning itself among the Top 3 middleware as e-invoicing platforms in the country. With its user-friendly features and robust e-invoice system compatibility, it’s no surprise why many businesses are turning to JomeInvoice for a seamless transition to the LHDN e-invoice compliance.
Why JomeInvoice is the Best e-invoicing Software Provider for SMEs and Large Enterprise Malaysia:
JomeInvoice stands out as the most user-friendly and comprehensive e-invoicing software solution, offering the perfect balance of flexibility, compliance, and support for both SMEs and large enterprise Malaysia. Whether you are transitioning into the LHDN e-invoicing mandate or looking to streamline your current invoicing process, JomeInvoice provides everything you need—from free trials to ongoing updates and local support.
- Flexible System Compatibility
JomeInvoice offers seamless integration with popular systems such as SAP ECC6, S4 Hana, Sage300, MS365, Netsuite, Odoo, Xero & etc. This flexibility makes it ideal for businesses of all sizes—whether you’re an SME or a large enterprise Malaysia, JomeInvoice adapts to your current operations without a hitch. - Full Compliance with LHDN e-invoicing Regulations
Compliance is key, and JomeInvoice ensures that your business meets all LHDN e-invoicing guidelines. ISO-certified and fully PDPA-compliant, JomeInvoice offers a secure, worry-free invoicing process that keeps you aligned with Malaysia’s regulatory standards. - 3-Month Free Subscription
JomeInvoice gives new users the opportunity to explore its full range of features at no cost for the first three months. This trial period is especially beneficial for SMEs looking to evaluate the platform before committing, with dedicated support from their expert Malaysian team included. - Trusted by Leading Businesses
Over 60+ major companies, including those in Phase 1 of Malaysia e-invoicing compliance, rely on JomeInvoice for their invoicing needs. The platform is proven to handle large-scale, complex transactions seamlessly, making it a trusted choice across industries. - Free Upgrades, Training, and Dedicated Support
JomeInvoice keeps your business up to date with automatic upgrades that maintain LHDN compliance. Plus, free training and access to a dedicated Malaysian support team ensure your staff can easily adapt to the platform. With cloud server capabilities, you’ll also benefit from secure, flexible invoicing solutions. - Backed by a Listed Company
JomeInvoice is not just reliable but also backed by a publicly listed company on Bursa Malaysia. This adds an extra layer of trust and assurance for businesses looking to invest in long-term solutions.
Ready to streamline your e-invoicing processes?
Contact JomeInvoice today and take advantage of the 3-month free subscription! Our dedicated team is ready to help your business stay ahead with compliance and efficiency.
Contact JomeInvoice Sdn Bhd:
- Address:
Level 38, MYEG Tower, Empire City Damansara, Jalan PJU 8, Damansara Perdana, 47820 Petaling Jaya, Selangor
D-04-07, Plaza Bukit Jalil (Aurora Place), No. 1, Persiaran Jalil 1, Bandar Bukit Jalil, 57000 Kuala Lumpur - Phone: +6016-732 0163
- Social Media:
LinkedIn | Facebook
Don’t wait—schedule a free e-invoice service consultation today and see why JomeInvoice is the top choice for businesses nationwide!
Read More on e-invoicing Malaysia Latest Updates
e-invoicing guide for Malaysia Small Businesses Under RM150k Revenue