This post is also available in: Malay
On 22nd May 2023, LHDN announced that e-Invoicing will be implemented in Malaysia in stages starting from 2024.
The implementation will be in four phases starting from June 2024 through to January 2027.
June 2024
Mandatory for businesses with annual revenue of RM100 million or over.
January 2025
Mandatory for businesses with annual revenue of RM50 million or over.
January 2026
Mandatory for businesses with annual revenue of RM25 million or over.
January 2027
Mandatory for ALL businesses.
Update
In October 2023, LHDN revised the implementation timelines to:
August 2024
Businesses with RM100m turnover or more.
January 2025
Businesses with turnover of between RM25m and RM100m
July 2025
ALL other businesses.
Who is required to implement e-Invoicing?
LHDN has stipulated that all individuals and legal entities undertaking commercial activities in Malaysia are required to comply, including:
- Associations
- Body of persons
- Branches
- Business trusts
- Co-operative societies
- Corporations
- Limited liability partnerships
- Partnerships
- Property trust funds
- Property trusts
- Real estate investment trusts
- Representative and regional offices
- Trust bodies
- Unit trusts.
Voluntary opt in
Businesses not in the revenue thresholds mentioned above may opt to implement e-Invoicing earlier.
Why opt for early implementation?
Although a business may have less than RM100m or RM50m turnover, it could have customers that fall in those thresholds.
As such, when these businesses issue invoices, it would facilitate digital exchange of the document.
How is turnover determined?
- Based on audited accounts for the financial year ended 2022. If the financial year was changed, then the turnover will be pro-rated over a 12 month period.
- For businesses that are not required to have audited accounts, as well as for individuals conducting commercial activities, turnover will be based on tax returns for year of assessment 2022.
What categories of transactions are affected?
The implementation of e-Invoice will cover:
- Business to Business (B2B)
- Business to Consumer (B2C)
- Business to Government (B2G)
Penalty for non-compliance
Failure to adhere to e-Invoicing requirements could result in a fine of not less than RM200.00 and not more than RM20,000.00 or imprisonment not exceeding 6 months or both.
What is an e-Invoice?
An e-invoice is a standardised way of creating, sending & receiving invoices electronically, facilitating the automated exchange of invoices between businesses.
This post is also available in: Malay