Malaysia Revises Phases of Mandatory E-Invoicing Rollout

The Inland Revenue Board of Malaysia (IRBM) has announced a further revision to Malaysia’s mandatory e-invoicing implementation timeline, extending the phased rollout into 2026 to give smaller businesses additional time to prepare.

On 5 June 2025, IRBM officially confirmed adjustments to the rollout plan, reflecting ongoing challenges faced by micro, small, and medium enterprises (MSMEs) in adopting e-invoicing.

Revised Implementation Timeline

The updated rollout phases are now structured as follows:

• Phase 3. Effective 1 July 2025
  Taxpayers with annual sales exceeding RM 5 million (approximately EUR 1 million)
• Phase 4. Effective 1 January 2026
  Taxpayers with annual sales between RM 1 million and RM 5 million
• Phase 5. Effective 1 July 2026
  Taxpayers with annual sales between RM 500,000 and RM 1 million

Exemptions

Taxpayers with annual sales below RM 500,000 (approximately EUR 110,000) remain fully exempt from the e-invoicing requirement.

Grace (“Soft Launch”) Period

The previously announced six-month grace period continues to apply to each phase. During the grace period:

• Taxpayers may issue consolidated e-invoices for all transactions
• If requested by the buyer, sellers must issue individual e-invoices for transactions exceeding RM 10,000 (approximately EUR 2,200)
• No enforcement actions under Section 120 of the Income Tax Act 1967 will be taken

Updates to E-Invoice Guidelines

To reflect the revised rollout, IRBM has published updated guidance:

• E-Invoice Guideline Version 4.4
• E-Invoice Specific Guideline Version 4.2

The key change introduced in the updated Specific Guideline is that, from 1 January 2026, all industries must issue an individual e-invoice for each transaction exceeding RM 10,000. For such transactions, consolidated e-invoices will no longer be permitted.