What is E-Invoice?

LHDN E-Invoice is not a human-readable PDF invoice. It is a machine-readable format. Malaysia LHDN e-Invoice only accepts machine-readable XML, and JSON files, not PDF, DOC, JPEG, or email.

Every invoice must be sent to LHDN for approval and validation by the Inland Revenue Board (IRB) before it can be printed as a verified invoice for your customer. IRBM will validate TIN and e-Invoice data structures/formats. Upon validation of the e-invoice, the supplier is obliged to share the cleared e-invoice with the buyer after embedding the validated link (provided by IRBM) in the form of a QR code on the e-invoice. The QR code can be used to validate the existence and status of the e-Invoice via MyInvois Portal.

When Do You Need To Start Implementing E-Invoicing For Your Business?

E-Invoice will be implemented in phases to ensure a smooth transition. The annual turnover or revenue for the implementation of E-Invoice will be determined based on the following:

Taxpayers with audited financial statements: Based on annual turnover or revenue stated in the statement of comprehensive income in the audited financial statements for financial year 2022.
Taxpayers without audited financial statements: Based on annual revenue reported in the tax return for the year of assessment 2022.
In the event of a change of accounting year end for financial year 2022, the taxpayer’s turnover or revenue will be pro-rated to 12 months for purposes of determining the e-Invoice implementation date

E-Invoice Implementation Timeline with 6 Months Interim Relaxation Period:

Targeted Taxpayers	Interim Relaxation Period
Taxpayers with an annual turnover or revenue of more than RM100 million	1 August 2024 to 31 January 2025
Taxpayers with an annual turnover or revenue of more than RM25 million and up to RM100 million	1 January 2025 to 30 June 2025
All other taxpayers	1 July 2025 to 31 December 2025

LHDN E-Invoice: What Are The Penalties For Non-Compliance?

Compliance with the Malaysian Inland Revenue Board’s (LHDN) E-Invoice mandate is obligatory, and failing to adhere to it can lead to significant repercussions for your business. Here’s what you should be aware of:

Fines

Failing to comply with e-invoice regulations can result in significant financial penalties ranging from RM200 to RM20,000.

Imprisonment

Non-compliance may even lead to imprisonment for a period not exceeding six months. This highlights the seriousness of the LHDN mandate.

More info: Offences, Fines and Penalties | Lembaga Hasil Dalam Negeri Malaysia

How SQL Helps E-Invoice

Streamline your Malaysian business for e-Invoice with SQL Account.

E-Invoice Tutorial

Learn more about e-invoice with Bryan Cheong, including Chinese, English & Malay language tutorials.

Get Started With E-Invoice

Find out how to start e-invoicing in your business. The ultimate guide for Malaysia e-invoice.

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