Complete Guide: E-Invoicing for Malaysia SMEs
Last update:
anja
Clare Shi
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Key takeaways
If you’re doing research on how to source wholesale from 1688.com, you may have a few questions such as:
If you’re doing research on how to source wholesale from 1688.com, you may have a few questions such as:
If you’re doing research on how to source wholesale from 1688.com, you may have a few questions such as:
What is e-invoicing?
E-invoicing refers to the real-time digital issuance, validation, and transmission of structured invoices—usually in XML or JSON format—through Malaysia’s official MyInvois portal or via API. Introduced by the Inland Revenue Board of Malaysia (LHDN), this digital system replaces paper and PDF invoices with secure, machine-readable formats.
Each e-Invoice must contain:
- Seller and buyer Tax Identification Numbers (TINs)
- A Unique Identifier Number (UIN)
- Detailed tax breakdowns
- A QR code for verification
Only invoices validated through LHDN are considered legally compliant.
What SMEs need to know about the e-invoicing timeline
Malaysia is phasing in e-invoicing based on annual revenue:
- > RM100M: 1 Aug 2024
- RM25M–RM100M: 1 Jan 2025
- RM5M–RM25M: 1 Jul 2025
- RM1M–RM5M: 1 Jan 2026
- RM500K–RM1M: 1 Jul 2026
Malaysian SMEs under RM500K are exempt unless opting in voluntarily. Businesses in each tier have a six-month grace period for compliance, during which monthly consolidated invoices are allowed (based on IRBM aggregation rules).
Benefits of e-invoicing
E-invoicing offers several practical benefits for SMEs:
- Greater accuracy: Eliminates manual errors and duplicates
- Faster payments: Real-time validation speeds up collections
- Cost efficiency: No more printing, postage, or physical storage
- Audit-readiness: Digital records simplify compliance
- Digital maturity: Aligns SMEs with national digitisation efforts and opens doors to incentives
Impact of non-compliance
Non-compliance with e-invoicing can lead to serious consequences:
- Fines and legal action: Penalties under Section 120 of the Income Tax Act 1967 range from RM200 to RM20,000 per invoice
- Rejected payments: Buyers may refuse non-valid invoices
- Operational delays: Lack of integration may disrupt workflows
- Regulatory audits: LHDN may escalate enforcement for violators
Guidelines for B2C and B2B cross-border businesses
E-invoicing is mandatory for all transactions involving Malaysian taxpayers, even for cross-border transactions where buyer or seller is located overseas, Malaysian SMEs must comply:
B2B Cross-Border (Exports & Imports)
- Exports: Malaysian sellers must validate e-invoices via MyInvois
- Imports: Malaysian buyers must self-bill and submit the invoice to LHDN
B2C Cross-Border (Foreign consumers)
- Malaysian exporters must issue e-invoices for foreign consumers
- These invoices don’t require buyer validation, but must still be submitted
Tip: Cross-border businesses can simplify reconciliation with accounting software like Xero, and send & receive money internationally using regulated and reliable payment solutions like WorldFirst.
Guidelines for B2C and B2B domestic businesses
Under Malaysia’s Continuous Transaction Control (CTC) model:
B2B Domestic
- All transactions must be validated by LHDN before issuing to buyer
B2C Domestic
- Invoices are optional unless requested by customers
- Sellers can issue monthly consolidated invoices within 7 days after month-end
For Cancellations
- Must be submitted within 72 hours of validation
- Require justification and resubmission if needed
How to submit e-invoicing
Option 1: MyInvois Web Portal (Manual)
Ideal for low-volume invoices or micro SMEs
- Manually input or upload invoice data
- Real-time validation
- UIN and QR code auto-generated
Option 2: API Integration (Automated)
Best for higher-volume invoices, businesses with multiple systems or medium-large businesses
- Enables seamless real-time submission
- Automates workflows
Tip: Middleware platforms like JomeInvoice can bridge the gap between operational systems and LHDN’s API.
Services to support e-invoicing
LHDN MyInvois Portal
Free and suitable for small-scale operations.
JomeInvoice Middleware
- Built for Malaysian SMEs
- Real-time LHDN integration, full audit trail
- Connects with POS, ERP, and accounting tools (e.g., Shopify, Cloudbeds, WooCommerce)
- Supports all transaction types: self-bill, refund, consolidation, cancellation
- Compliant with LHDN’s e-invoice guidelines, PDPA, ISO27000 standards
Send smarter invoices, get paid faster
As you scale your SME into regional markets, it’s not just about sending invoices—it’s about getting paid and paying faster and, more securely. This helps your cashflow, especially for smaller businesses and more importantly, strengthen your relationship and reliability between you and your suppliers or customers.
Solutions like WorldFirst allow cross-border SMEs to:
- Receive cross-border payments in 20+ currencies
- Hold funds at no cost in a multi-currency business account in Malaysia
- Save and simplify money transfer from Malaysia to suppliers or HQ, with same-day payments to China, USA and Europe via WorldFirst’s local network and strong banking partnerships.
- $0 account opening, $0 minimum balance, $0 receiving fees, $0 annual fees
- Have peace of mind when your business payments are securely transferred between our network of tier-1 banks, like OCBC, JP Morgan, Citibank and more. WorldFirst also operates in Malaysia with a regulated Class A license, adding to its 60+ global licences worldwide.
Open a WorldFirst account to start making easier, faster and cheaper cross-border payments.
When you’re making supplier payments, depending on the situation, a business will need to decide if its self-issued e-invoicing or supplier-issued e-invoicing (consolidated or unconsolidated). Once businesses familiarise with which e-invoicing works best for your business, this helps to streamline your invoicing and cross-border cash flow.
Reference link (if any):
References
Funding Societies Malaysia – E-Invoice Overview and Software Guide
Global VAT Compliance – Malaysia E-Invoice Deadline and Mandatory Guidelines
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