Malaysia to Introduce Nationwide E-Invoicing Mandate from June 2024

Malaysia has confirmed plans to introduce a countrywide e-invoicing mandate using a centralized pre-clearance CTC model, with a phased rollout starting in June 2024 and full coverage expected by 2027. The initiative aims to improve tax administration efficiency, strengthen compliance, and support digital transformation.

The system will be implemented by the Inland Revenue Board of Malaysia (LHDNM) and will combine a centralized clearance model with the Peppol network.

How the E-Invoicing Model Will Work

Under the new framework:

• Suppliers must submit invoices to LHDNM for validation and approval before sending them to buyers
• Once approved, LHDNM will issue a Certification Serial Number and notify both the issuer and the recipient
• Taxpayers may then choose how to exchange the cleared invoice, with Peppol as the preferred but not exclusive channel
• QR codes will be mandatory on image-based invoice representations, allowing buyers to verify invoices by scanning the code

Scope of the Mandate

The obligation will apply broadly across:

• B2B, B2G, and B2C transactions
• Domestic and cross-border transactions
• All industries and company sizes

Rollout Timeline Based on Business Revenue

LHDNM will begin pilot testing with selected taxpayers in early 2024, followed by mandatory adoption in phases:

• June 2024. Businesses with annual sales above RM 100 million
• January 2025. Businesses with annual sales above RM 50 million
• January 2026. Businesses with annual sales above RM 25 million
• January 2027. Mandatory for all businesses

B2C Transactions

From 2027, the obligation will extend to B2C transactions, where e-Receipts will be used instead of e-Invoices. These transactions are expected to follow a real-time reporting model, rather than pre-clearance.

Voluntary Adoption and Free Portal

Taxpayers may begin using e-invoicing voluntarily from January 2024. LHDNM will also provide a free portal, myTax, allowing businesses to issue and receive e-invoices manually.

Further guidance on technical specifications and operational details is expected as the rollout progresses.