Malaysia Delays E-Invoicing Implementation for MSMEs to 2026
Malaysia has delayed mandatory e-invoicing for MSMEs with turnover up to RM 500,000 to January 2026, introducing a new rollout phase, extended grace periods, and updated IRBM guidelines.
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.
