Malaysia e-Invoice 2025: What Every Business Needs to Know

Malaysia is taking a major step toward digital transformation in 2025 with the full implementation of the e-Invoicing system. This system, initiated by the Inland Revenue Board of Malaysia (LHDN), will soon be mandatory for all businesses. It aims to improve tax compliance, reduce fraudulent practices, and simplify financial and administrative operations for companies of all sizes.

What is the e-Invoice System?
An e-Invoice is a digital version of a traditional paper invoice. It records details of a business transaction between a supplier and a buyer, including goods or services provided, pricing, tax, and more. Unlike paper invoices, e-Invoices are created, submitted, validated, and stored electronically via LHDN’s official portal — MyInvois.

Why the e-Invoice System is Being Introduced:

• To improve transparency in financial reporting and reduce underreporting of income
• To provide real-time visibility of transactions to tax authorities
• To help businesses cut down on paperwork and administrative overhead
• To strengthen efforts against tax evasion and increase overall tax compliance

How Does the e-Invoice System Work?
The system follows a few simple but powerful steps:

1. Create Invoice: The seller uses their billing or accounting software to generate the invoice.
2. Submit to LHDN: The invoice is sent to the MyInvois platform where it is reviewed.
3. Validation: LHDN instantly checks and validates the invoice for accuracy and compliance.
4. Delivery to Buyer: Once validated, the invoice is delivered electronically to the buyer.
5. Storage: Both parties retain digital copies of the invoice, simplifying audits and recordkeeping.

This process ensures every invoice is authenticated and securely stored, reducing human error and duplication.

e-Invoice Submission Process
To comply with the e-Invoicing system, businesses will follow a specific submission process:

1. Access MyInvois Portal: Register and access the MyInvois platform provided by LHDN.
2. Invoice Generation: Prepare invoice data in the required format (JSON or through integrated accounting software).
3. Submit for Validation: Send the invoice to LHDN’s portal for real-time validation.
4. Receive Clearance: Once validated, LHDN provides a Unique Identifier and QR code for the invoice.
5. Send to Buyer: Share the validated e-Invoice with the buyer along with the clearance details.
6. Keep Records: Retain the validated invoice for audit and reference purposes.

MyInvois also offers APIs for automated integration, allowing companies to submit and retrieve invoices directly from their existing accounting systems.

Implementation Timeline
To give businesses time to adjust, LHDN is rolling out the e-Invoice system in phases:

• 1 August 2024: Mandatory for businesses with annual turnover exceeding RM 100 million.
• 1 January 2025: Applies to businesses with annual turnover between RM 25 million and RM 100 million.
• 1 July 2025: Becomes mandatory for all businesses, regardless of size or revenue.

By July 2025, every business operating in Malaysia must adopt e-Invoicing practices.

Penalties for Non-Compliance
Failure to comply with e-Invoicing requirements may result in the following penalties:

• Administrative Fines: LHDN may impose monetary fines for not issuing or validating invoices.
• Audit Risks: Non-compliant businesses may be subject to more frequent and detailed audits.
• Business Delays: Invalid or rejected invoices can disrupt payment and delivery processes.
• Tax Filing Issues: Discrepancies between invoicing and tax reports may trigger investigations.

Ensuring timely and accurate submission of e-Invoices is critical to avoid penalties and maintain good standing with LHDN.
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Key Benefits of e-Invoicing
Adopting e-Invoicing offers multiple long-term advantages:

• Better Compliance: Ensures that tax filings match actual business activity
• Improved Efficiency: Reduces time spent on manual paperwork and repetitive tasks
• Cost Savings: Minimizes costs related to printing, mailing, and storing paper documents
• Faster Processing: Improves payment cycles and reduces disputes with buyers
• Stronger Audit Trails: All transactions are easily traceable and archived in digital form

What Businesses Should Do to Prepare
Here’s how you can start getting ready for e-Invoicing:

1. Learn the Guidelines: Read and understand the e-Invoice requirements from LHDN.
2. Assess Your Systems: Check if your current accounting software can connect with MyInvois.
3. Upgrade or Integrate: Work with vendors or consultants to upgrade your systems if necessary.
4. Staff Training: Make sure your finance and admin teams are trained to handle e-Invoices.
5. Get Professional Help: Consult experts to ensure smooth adoption and full compliance.

Lim & Ani Advisory Team: Your Partner in e-Invoicing Success
Adopting a new system like e-Invoicing can be challenging, but with the right guidance, it becomes a smooth journey. At Lim & Ani Associates, we provide complete support to help you understand, implement, and maintain the e-Invoicing system in line with LHDN’s guidelines.
Our advisory services include:

• Business system assessments and readiness evaluations
• Hands-on integration support with the MyInvois portal
• Customized staff training for easy onboarding
• Real-time support and updates on compliance changes

We work with small startups to large enterprises to ensure that you stay on top of regulatory changes while focusing on growing your business.

​Call, Email or text us & take an appointment from the website to visit our office in Malaysia.
LIM & ANI ASSOCIATES SDN BHD
Call: +601126664168
Call: +60102069253
Call: +603-58856648 (office landline)
Email: [email protected]
www.mbbusinessjoint.com

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