Malaysia’s Electronic Invoice (e-Invoice) System​

A Giant Step Towards Tax Digitalisation

Meng Huei Foo


The global digital transformation has brought significant changes to traditional business practices. One area that has undergone substantial transformation is invoicing. With the rise of technology and automation, businesses are increasingly shifting towards electronic invoicing, or e-invoicing, to enhance efficiency, reduce costs and improve overall financial management. The Government announced its intention to implement e-invoice in stages in an effort to enhance the efficiency of Malaysia’s tax administration management.

Against this backdrop, the Inland Revenue Board of Malaysia (IRBM) issued the much-awaited e-Invoice Guideline Year 2023 (Guideline) on 21 July 2023. The Guideline addresses the scope of implementation of the e-invoice which comprises the simplified e-invoice concepts, the step-by-step guidance on key aspects of e-invoice, practical examples and common questions regarding e-invoices. 



What is an e-invoice?

An e-Invoice is a digital representation of a transaction between a supplier and a buyer. An e-Invoice shall replace any other invoice formats that are presently adopted by businesses. These include paper invoices, scanned invoices, invoices in pdf format, etc.

An e-Invoice contains almost similar information as a traditional invoice, for example, supplier’s and buyer’s details, item description, quantity, price excluding tax, tax and total amount. The difference is that an e-Invoice is a file created in the format specified by the IRBM which can be validated by the IRBM’s MyInvois Portal.

E-Invoices cover typical transaction types such as Business-to-Business (B2B), Business-to-Consumer (B2C) and Business-to-Government (B2G) transactions.

Who will be required to comply with the e-invoicing requirements?

The e-Invoice applies to all taxpayers undertaking commercial activities in Malaysia. This includes businesses engaged in the provision of goods and services and certain non-business transactions between individuals.

All individuals and legal entities are required to comply with e-invoice requirements, including the 14 categories of taxpayers:

  • Corporations
  • Association
  • Body of persons
  • Branch
  • Business trust
  • Co-operative societies
  • Limited liability partnership
  • Partnership
  • Property trust fund
  • Property trust
  • Real estate investment trust
  • Representative office and regional office
  • Trust body
  • Unit trust
Exploring Malaysia's Digital Haven - The De Rantau Nomad Pass

What types of transactions are covered in the e-invoicing requirements?​

The Guideline sets out 2 scenarios that require e-invoices to be issued:

  1. Proof of income: e-invoices are to be issued by the taxpayer when a sale or other transaction is made to recognise income.
  2. Proof of expenses: e-invoices issued by a vendor / supplier should be in place as evidence to support taxpayers’ expenses, such as purchase of goods and services, payment of business expenses, return of goods and discounts given. For purchases of goods or services from a foreign supplier, the IRBM states that the Malaysian party (i.e. purchaser) will need to issue a self e-invoice to document such expense incurred. This is because foreign suppliers do not issue e-invoices under the MyInvois System and require the Malaysian taxpayer to issue a self e-invoice instead.   

There are 4 types of e-invoice documents to be issued which seek to address different transactional needs of a business:

  • Invoice – Records sales transactions of suppliers for sales made to buyers, including self-issued invoices by the Malaysian buyer to document expenses invoiced by foreign suppliers
  • Credit note – Records reduction in the value of the original e-invoice (does not involve a refund of monies by the supplier to the buyer)
  • Debit note – Records increase in the value of the original e-invoice
  • Refund e-invoice – Records refund of the overpayment by a buyer

A supplier / seller needs to issue e-Invoices for its sales to local buyers (domestic sales) as well as foreign buyers (international sales).

When is the e-Invoicing implementation date?

To facilitate existing taxpayers in their full transition to the e-invoicing system, the implementation will be staggered over 3 years from June 2024 to December 2026. The date of implementation shall depend on the taxpayer’s annual sales turnover in the reference year which is the taxpayer’s financial year ended in 2022.

The timelines for existing taxpayers (those which commenced business in either 2022 or in a prior year) and new taxpayers (those which commenced business in 2023 or after) are shown in the table below:


Existing or New Taxpayer

Annual Sales Revenuein 2022




More than RM100 million

1 June 2024



More than RM50 million and up to RM100million

1 January 2025



More than RM25 million and up to RM50million

1 January 2026



RM25 million or below, and certain non-business transactions between individuals(details not available at this juncture)

1 January 2027



Not applicable

1 January 2027

For taxpayers who are ready for early adoption of the e-invoicing system, they may opt to do so at an earlier date.

The IRBM has also clarified in the Guideline that the annual turnover or revenue for 2022 in ascertaining the date of implementation can be obtained from:

  • audited financial statements for the financial year ended 2022, or
  • tax returns (e.g. Form C, Form B, Form PT, etc.) for year of assessment 2022 filed to the IRB for taxpayers without the audited financial statements.

Further, if the taxpayer’s financial year for 2022 exceeds or falls short of the normal 12 months period due to a change of accounting year end, the taxpayer’s turnover or revenue will be pro-rated to a 12-month period for purposes of determining the e-Invoice implementation date.


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Foo Meng Huei
Meng Huei Foo
Head of Tax
Location: Kuala Lumpur