E-Invoicing in Malaysia: What SMEs Need to Know

• • Malaysia's E-Invoicing Mandate: The IRBM has made e-invoicing mandatory for all registered Malaysian businesses (See IRBM overview and general FAQs for scope and definitions.).

  • Phased Implementation: Rolled out in phases, with the latest effective date being July 1, 2025, for companies with RM5-25 million turnover (Phased rollout and latest effective dates are set by IRBM/MOF.).

  • Submission Methods: E-invoices can be submitted via the MyInvois portal (manual) or API integration (automated) in UBL 2.1 format as outlined in the IRBM e-invoice guideline (XML or JSON).

  • E-Invoice Components: E-invoices are digital records with 55 fields, including seller/buyer details, transaction info, tax breakdown, and a Unique Identification Number (UIN) with QR code.

  • Transaction Coverage: Applies to B2B, B2C, B2G, and some non-business transactions.

  • Required Docum ents: Invoices, credit notes, debit notes, and refund notes.

  • SME Financing Solutions: Funding Societies offers invoice financing, SME micro financing, and property-backed secured financing to assist businesses with e-invoicing transition costs.

  • Government Support: Budget 2025 provides microloans, matching grants, BNM loan funds, SJPP loan guarantees, and tax deductions to support digitalisation, refer here for more details.

This is our guide to e-invoicing Malaysia, an initiative that is already changing the way businesses work. The Inland Revenue Board of Malaysia (IRBM) has made it mandatory for all registered businesses in Malaysia to create electronic invoices (e-invoices) for every transaction.

Phase 1 started on August 1, 2024, for companies with a turnover of more than RM100 million. Phase 2 started on January 1, 2025, for companies with a turnover of more than RM25 million, and Phase 3 started on July 1, 2025, for companies with a turnover of between RM5 million and RM25 million.

“What we initially planned… was to implement the system effective July 1 (2025) for companies with annual sales of RM500,000 and above. However, we understand their concerns, especially the MSMEs, and have revised it into three additional phases.”
— Deputy Finance Minister Lim Hui Ying

These companies now use the MyInvois portal or direct API integration to send e-invoices to the IRBM in the UBL 2.1 format (XML or JSON). As the next rollout phases approach, it is critical for both large and small businesses to understand what e-invoicing is, how it operates, and how it will impact their operations.
(Budget 2025 update / phased approach as per MOF.)

When Does E-Invoicing Start for Your Business?

The IRBM is rolling out e-invoicing in phases according to business turnover, starting with the largest companies. With deadlines stretching from 2024 to 2026, small and medium-sized businesses have more time to prepare. There is also a six month grace period after your mandatory start date, which gives businesses a chance to test our systems and train their team to fully comply.

📅 Not sure when you need to comply? Check the full E-Invoicing Implementation Timeline to find the start dates for your business.

E-Invoicing Guidelines for Specific Industries in Malaysia

E-invoicing rules are a little different for each industry because of different billing models and rules. The IRBM has put out official guidelines for each industry to help you figure out how e-invoicing applies to your business.

We at Funding Societies have taken these guidelines and made specific articles for key sectors, such as

• Construction Industry
• E-Commerce Industry
• Healthcare Industry
• Tourism Industry
• Retail Industry
• F&B Industry
• Manufacturing Industry
• Wholesale Industry
• Professional Services & Agencies
• Used Car Dealers
• Car Workshops and Repair Services

Each guide explains:

• Compliant transaction types
• How to deal with common billing situations
• Tips on how to manage cash flow during the transition
  

For the most up-to-date information, check the official guidelines or the above resources for your industry.

What is an E-invoice and Why is Malaysia Implementing E-Invoicing?

E-invoices are digital records of transactions between a buyer and a supplier. By letting businesses create and save machine-readable, digital invoices, it eliminates the need for paper invoices while also streamlining billing and payment processes. The e-invoicing initiative also enables real-time validation and recording via the IRBM government site. 

E-invoices will be generated using XML and JSON formats as required by IRBM, with 55 fields, 37 of which are necessary, including seller and buyer information, item description, quantity, price, tax, total amount, payment information, and so on.

Successfully verified and generated e-invoices would additionally include a Unique Identification Number (UIN) and QR Code generated by the MyInvois Portal, allowing for online validation of the invoice.

What are the Different E-Invoicing Transaction Types?

All taxpayers who conduct commercial activities in Malaysia are required to use e-invoicing. It will make it easier to validate and save transactions between businesses (“B2B”), consumers (“B2C”), and government entities (“B2G”). It will also cover certain non-business transactions between individuals.

For certain B2C transactions whereby the end consumer does not require e-invoices for tax purposes, providers are allowed to issue standard receipts or invoices in accordance with current procedures.

Who in Malaysia Has to Adhere to E-invoicing

The following must comply with e-invoicing in accordance with the IRBM’s guidelines:

• Associations
• Body of persons
• Branches
• Business trusts
• Co-operative societies
• Corporations
• Limited liability partnerships
• Partnerships
• Property trust funds
• Property trusts
• Real estate investment trusts
• Representative offices and regional offices
• Trust bodies
• Unit trusts

Meanwhile, the following are exempt from the e-invoicing mandate:

• Foreign diplomatic offices
• Individuals that are not conducting business
• Statutory bodies and authorities: For collection of fees, taxes, or statutory levies and for transactions before 1 July 2025
• International organizations (for transactions before 1 July 2025)
• Taxpayers with annual revenue under RM150,000
  Exemptions and effective dates are determined by IRBM/MOF and may change; check the latest notices.
  

What Does an E-Invoice Include?

An e-invoice is more than just a PDF file of an invoice. To comply with Malaysia’s e-invoicing rules, your e-invoices must be in a structured digital format (XML or JSON) so they’re compatible with the IRBM’s MyInvois portal. An e-invoice should also  include key details like buyer and seller info, itemised charges, and tax breakdowns. The IRBM’s MyInvois system checks every e-invoice in real time and only approves those that meet the exact format and field requirements.
(Field specs and UBL 2.1 mapping: IRBM Guideline.)

🔍 Not sure what your e-invoice should look like? Learn more about the e-invoicing format and required fields here.

How Does the E-Invoicing Process Work?

Once you create an e-invoice, submit it to IRBM through the MyInvois system for validation. From there, it starts the e-invoicing process, which includes real-time checks, QR code generation, and automatic notifications. Both suppliers and buyers can also access invoice data through the portal, with a 72-hour window for rejections or corrections.

🔄 Complete E-Invoicing Process Guide: Get the detailed 6-step workflow: submission, validation, notifications, QR codes, and rejection handling.

Mandatory E-Invoice Documents in Malaysia

The following documents must be created in an electronic format under Malaysia’s e-invoicing guidelines

Invoices

Invoices record transactions between suppliers and buyers. Self-billed invoices for expense tracking also fall under this category.

Credit Notes

Sellers issue credit notes to rectify an e-invoice that has already been issued, typically to reduce the original value without making a direct refund. Credit notes are used to adjust errors, apply discounts, and account for returned items.

Debit Notes

The opposite of credit notes, debit notes record additional costs related to a previously issued e-invoice.

Refund Notes

An official document that sellers issue to a buyer to record a refund.

E-Invoicing Models in Malaysia: MyInvois Portal vs API Integration

The IRBM provides two ways for businesses to submit e-invoices, depending on scale, budget, and digital readiness.

MyInvois Portal

A web-based platform suitable for small businesses or those with low invoice volumes. Invoices must be entered manually.

API Integration

Recommended for businesses with high invoice volumes. This allows automated submission of e-invoices directly from your accounting or ERP systems.

Bonus Option: MyInvois Mobile App

IRBM also offers a mobile app version of MyInvois for small vendors who don’t use accounting software. This is ideal for:

• Food stalls
• Market traders
• Mobile service providers

This mobile solution is meant to cater to small traders, hawkers, and roadside vendors, as they use basic digital systems and may not have use accounting tools.

The need for better government communication and support for these groups is echoed by advocacies like Wanita MCA Chairperson Wong You Fong:

“We hope that the government will provide hawkers with detailed information on the new mechanism’s specific content and implementation methods in advance to avoid disruptions to their daily operations.”

Start the transition early, regardless of the model you choose. It is easy to underestimate how long integration, testing, and training take.

Choosing the Right E-Invoicing Solution for Your Business

Not sure which e-invoicing solution would suit your business best? There a few things to consider, mainly how many invoices you send, how your business works, your resources, and even the existing tools in your day-to-day. This is true whether you run a kedai runcit, an online store, or a service agency.

Do you fall into any of these categories?

1. You issue a low volume of invoices

If you only generate a few invoices each month, the free MyInvois portal by IRBM might be enough. It allows manual data entry via web browser, making it suitable for micro businesses or those just getting started. But as your operations grow, manual entry can become time-consuming.

2. You’re already using accounting or POS software

Many accounting or POS softwares are e-invoicing ready. If you are already on a platform like SQL, AutoCount, or Xero, you may just need to enable an e-invoicing add-on in the system to comply. Since these systems are integrated, it helps to streamline or automate e-invoice submissions and reduce human error.

3. You don’t have a system yet

If you’re still using Excel or handwritten invoices, now is a good time to invest in digital tools, as it will soon be mandatory for all businesses, no matter how small. Many SME-focused solutions like Bukku or Biztory offer simple accounting features along with compliant e-invoicing functions. Consider trying those with free trials or basic plans to start with.

4. You want something simple and dedicated to e-invoicing

Prefer to keep things lightweight and focus only on e-invoicing? Standalone platforms like JomeInvoice allow you to focus only on e-invoicing without the extra accounting features. These are suitable for small teams or businesses in early stages of digital adoption and want to comply with e-invoicing.

Want more help comparing tools?
Read our full guide to choosing an e-invoice software in Malaysia.

What are the Benefits (and Challenges) of E-invoicing?

The benefits of e-invoicing goes beyond just regulatory compliance. In the long run, e-invoices can help businesses save time, bring down costs and improve cash flow. But like any system change, it also comes with practical challenges, especially for SMEs still relying on manual invoicing or older systems.

Understanding both sides of the equation can help your business make a smoother transition.

💡 Get the full breakdown of benefits and challenges of e-invoicing for Malaysian businesses.

Notable Reports and Articles on E-Invoicing

Want to explore studies and academic articles on e-invoicing in Malaysia? Here are notable resources with insights on how e-invoicing is impacting SMEs, policymakers, tech providers, and consultants, from implementation challenges to tax compliance.

Final Thoughts: Prepare Early, Stay Competitive

E-invoicing is no longer optional. It’s becoming a core requirement for doing business in Malaysia. However, compliance aside, there are advantages to e-invoicing that can help future-proof your business while eliminating outdated processes.

“While there may be initial challenges in adopting e-invoicing, the long-term benefits outweigh the drawbacks. With proper planning and support, Malaysia can successfully transition to a paperless invoicing system.” — Dato Jonathan Chai (Sarawak Business Federation)

Early preparation matters:

• Avoid last-minute disruptions

Integration, training, and testing take time. Businesses that start early are less likely to experience operational hiccups close to the deadline.

• Smooth out cash flow challenges

Delays in client payments won’t disappear overnight. By planning ahead and securing financing where needed, you can maintain healthy operations throughout the transition.

Sources:

1. https://thesun.my/business-news/tax-matters-do-not-delay-the-implementation-of-e-invoicing-GA12034741#google_vignette
2. https://www.hasil.gov.my/media/0xqitc2t/lhdnm-e-invoice-general-faqs.pdf
3. https://www.hasil.gov.my/media/fzagbaj2/irbm-e-invoice-guideline.pdf
4. https://www.hasil.gov.my/en/e-invoice/guidelines/e-invoice-illustration-guide/
5. https://www.hasil.gov.my/media/uwwehxwq/irbm-e-invoice-specific-guideline.pdf
6. https://belanjawan.mof.gov.my/ms/
7. https://belanjawan.mof.gov.my/pdf/belanjawan2025/ucapan/ub25-en.pdf
8. https://www.thestar.com.my/news/nation/2025/01/03/phase-2-of-e-invoicing-hits-snags
9. https://www.hasil.gov.my/en/e-invoice/implementation-of-e-invoicing-in-malaysia/

e-Invoicing Malaysia Frequently Asked Questions (FAQ)