Malaysia e-Invoicing Guide 2025: LHDN MyInvois Phases, Deadlines & Compliance

The Mandate Is Already Moving — Here Is Exactly Where You Stand

Malaysia’s e-invoicing mandate through LHDN’s MyInvois system is not a future event. It is live, phased, and enforced. Since the rollout began in August 2024, more than 64.5 million e-invoices have been submitted to the MyInvois system (as of November 2024) — and that number grows every day as more businesses come into scope.

The mandate covers all transaction types: B2B, B2C, and B2G. Every validated e-invoice must contain up to 55 specific data fields, be digitally signed with an LHDN-issued certificate, and be submitted in real time through the MyInvois portal or via API.

 

Phase Timeline: Know Your Deadline

The rollout is structured by annual turnover. Here is the current schedule based on the latest LHDN guidelines (updated June 2025):

• Phase 1 (1 Aug 2024): Businesses with annual turnover above RM100 million. Full enforcement active.
• Phase 2 (1 Jan 2025): Businesses with turnover between RM25 million and RM100 million. Full enforcement active.
• Phase 3 (1 Jul 2025): Businesses with turnover between RM5 million and RM25 million. Full enforcement active.
• Phase 4 (1 Jan 2026): Businesses with turnover between RM1 million and RM5 million. Live from Jan 2026 with a relaxation period extended to 31 December 2027.
• Exemption: Businesses with annual turnover below RM1 million are permanently exempt (threshold raised from RM500,000 effective 1 January 2026). Exemption is not automatic — LHDN MSME criteria apply.

 

What Non-Compliance Costs

Failure to issue a valid e-invoice is an offence under Section 120(1)(d) of the Income Tax Act 1967. Each non-compliant invoice is a separate offence, carrying:

• A fine between RM200 and RM20,000 per instance, or
• Imprisonment of up to 6 months, or both

Note: from 1 January 2026, individual e-invoices are mandatory for transactions above RM10,000. Consolidated invoices are no longer permitted for those amounts.

 

What Your Business Actually Needs to Do

Three submission paths are available. Most SMEs use option 2:

• MyInvois Portal: Free, suitable for low-volume businesses. Manual process.
• Integrated accounting software: SQL, AutoCount, QNE, Million, Xero — all have built-in MyInvois submission as of 2024. Best for SMEs.
• Direct API / PEPPOL integration: For high-volume businesses or those with custom ERP systems. Requires developer resource or a certified solution provider.

Regardless of path, you will need to: register on MyInvois, confirm your phase and turnover threshold, ensure your system can generate the 55 required data fields, train staff on rejection and cancellation workflows (you have a 72-hour window), and establish a digital signing certificate from LHDN.

 

Why Complying Early Pays Off

Beyond avoiding fines, early e-invoicing compliance converts every transaction into a structured data point. Over time, that data feeds better forecasting, faster audits, cleaner financial reporting, and stronger credit assessments with banks and investors.

Businesses in Malaysia that build this foundation now will be significantly better positioned as the country’s broader digital tax infrastructure continues to mature — and as future phases potentially extend to cross-border and B2C transactions.

AppAsia’s e-invoicing solution is LHDN-compliant, MDEC-endorsed, and designed to integrate with what you already use. Our team in Kuala Lumpur can have most businesses ready within days, not weeks.

 

Frequently Asked Questions

What is the LHDN e-invoice mandate and does it apply to my business?

Malaysia’s e-invoicing mandate requires businesses to issue and receive electronic invoices in real time through LHDN’s MyInvois system. It applies to all businesses above the RM1 million annual turnover threshold. If you are below RM1 million, you are exempt but can opt in voluntarily. The phase you fall under depends on your exact annual revenue — see the phase timeline above.

What are the penalties for not complying with Malaysia’s e-invoicing requirement?

Non-compliance is an offence under Section 120(1)(d) of the Income Tax Act 1967. Each non-compliant invoice carries a fine of RM200 to RM20,000 or up to 6 months’ imprisonment, or both. Each invoice is treated as a separate offence, so the exposure compounds quickly for high-volume businesses.

Does AppAsia’s e-invoicing solution connect to existing accounting software?

Yes. AppAsia’s solution is built for seamless integration with commonly used Malaysian accounting platforms including SQL, AutoCount, QNE, and others, as well as custom ERP systems via API. AppAsia is an MDEC-endorsed solution provider and our team in Kuala Lumpur handles the full setup, testing, and staff onboarding process.