The Inland Revenue Board (IRB) of Malaysia has announced a revised timeline for the mandatory implementation of e-invoicing, offering relief to Malaysian micro, small, and medium enterprises (MSMEs) with annual revenues below RM5 million.
Initially set for a full rollout by July 1, 2025 (next month), the updated schedule provides a phased approach to ease the transition for smaller businesses, acknowledging their need for additional preparation time to adopt the digital tax system.
This decision reflects the government’s commitment to supporting MSMEs while advancing Malaysia’s digital economy.
Revised E-Invoicing Schedule for SMEs in Malaysia
The revised e-invoicing schedule categorizes businesses based on their annual revenue, with specific deadlines tailored to their capacity to comply.
Businesses with annual revenues between RM5 million and RM25 million must still implement e-invoicing by July 1, 2025, as originally planned.
However, smaller businesses face deferred deadlines, giving them more time to adapt their systems and processes.
The IRB has also introduced a six-month grace period following each phase’s mandatory implementation date to ensure smoother compliance without immediate penalties.
Here are the key details of the updated e-invoicing implementation schedule:
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RM5 million to RM25 million: Mandatory e-invoicing by July 1, 2025.
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RM1 million to RM5 million: Implementation deferred to January 1, 2026.
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RM500,000 to RM1 million: Implementation deferred to July 1, 2026.
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Below RM500,000: Exempted from e-invoicing for the time being.
Delayed E-Invoicing Implementation
The IRB’s decision to delay e-invoicing for MSMEs comes in response to concerns about the operational challenges these businesses face, such as limited resources and technological infrastructure.
The government recognizes the importance of MSMEs in Malaysia’s economy and aims to balance the push for digital tax compliance with practical support for smaller enterprises.
During the grace period, businesses can issue consolidated e-invoices for transactions, and no penalties will be imposed under Section 120 of the Income Tax Act 1967, provided they meet consolidated e-invoice requirements.
This phased approach aligns with Malaysia’s broader goal of enhancing tax administration efficiency through the MyInvois portal, which supports real-time validation of business-to-business, business-to-consumer, and business-to-government transactions. The IRB encourages businesses to use the extended timeline to prepare, including adopting compatible software and training staff.
As Malaysia continues its digital transformation, the government remains focused on ensuring that all businesses, regardless of size, can successfully transition to e-invoicing.
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