Malaysia Delays E-Invoicing Implementation for MSMEs to 2026

The Inland Revenue Board of Malaysia (IRBM) and the Malaysian Government have announced a revised timeline for the rollout of mandatory e-invoicing, providing additional preparation time for micro, small, and medium enterprises (MSMEs).

On 20 February 2025, authorities confirmed that e-invoicing requirements for certain MSMEs will be postponed to 1 January 2026.

Revised Implementation Timeline

The updated rollout introduces a clearer segmentation of taxpayers by turnover:

Phase 3. Effective 1 July 2025
Applies to taxpayers with annual turnover or revenue:

• More than RM 500,000 and up to RM 25 million

Phase 4. Effective 1 January 2026
Applies to taxpayers with annual turnover or revenue:

• More than RM 150,000 and up to RM 500,000

This change delays mandatory e-invoicing for smaller MSMEs that were previously expected to comply earlier.

Grace (Relaxation) Period

As previously announced, each implementation phase includes a six-month grace period, during which consolidated e-invoices may be issued for all transactions.

• Phase 3 grace period: 1 July 2025 to 31 December 2025
• Phase 4 grace period: 1 January 2026 to 30 June 2026

During these periods, penalties will not apply provided businesses comply with consolidated e-invoicing rules.

Full Exemption

Businesses with an annual turnover below RM 150,000 remain fully exempt from the e-invoicing mandate.

Updated Guidelines

To reflect the revised timeline and scope, IRBM has published updated guidance:

• E-Invoice Guideline Version 4.2
• E-Invoice Specific Guideline Version 4.1

These updates formally incorporate the new MSME phase and revised thresholds.