E-Invoice compliance phases

LHDN's e-Invoice Voluntary Disclosure Programme (from 7 July 2026) lets mandated businesses voluntarily correct or submit missed e-invoices with zero penalty until 31 December 2027. It covers partial reporting, incorrect or non-compliant invoices, and complete non-submission after your mandate date. Fix it now while the window is open. This is an educational reference, not tax advice, confirm with LHDN or a tax agent.

Individual e-invoices should be issued at or near the transaction and validated promptly (the issue date cannot be more than 72 hours before submission). For B2C consolidated e-invoices, submit within 7 days after month-end, for example January sales by 7 February. Missing these is a compliance breach (Section 120(1)(d), Income Tax Act 1967: a fine of RM 200 to RM 20,000 per instance), though the Voluntary Disclosure Programme currently waives penalties for voluntary catch-up until 31 December 2027.

LHDN bases phase assignment on your annual turnover as declared in your tax return. If you are near a boundary (for example, close to RM 5 million or RM 25 million), monitor your financials carefully. A spike in revenue mid-year could push you into the next phase. Consult your accountant to determine your reference year.

Phase 4 businesses (RM 1 million to RM 5 million turnover) have been mandatory since 1 January 2026. LHDN extended the penalty-free relaxation period to 31 December 2027 (up from the earlier 31 December 2026), with full penalty enforcement from 1 January 2028. During the relaxation window, businesses may issue consolidated e-invoices for all transactions and use more flexible descriptions, but must still issue e-invoices. Note: any single transaction of RM 10,000 or more must be issued as an individual e-invoice from 1 January 2026 and cannot be consolidated.

Voluntary adoption is encouraged and comes with government incentives: a special tax deduction of up to RM 50,000 per year of assessment for e-invoice implementation, accelerated capital allowance on ICT equipment, and an MSME digitalisation grant of up to RM 5,000. Adopting early also means you are ready before your turnover crosses RM 1 million, and larger B2B customers increasingly require e-invoices from their suppliers.

The official source is the LHDN MyInvois portal at sdk.myinvois.hasil.gov.my. Always check the official announcements directly, as rollout dates and phase boundaries may be updated by LHDN. This page is for educational reference only.

Turnover generally refers to your total annual sales revenue as reported in your income tax return or audited financial statements. It is not profit. If you are unsure which figure applies to your business structure, seek guidance from a licensed tax agent.

No. This tool is a reference guide only. It does not constitute legal or tax advice. For definitive guidance, refer to LHDN publications or engage a registered tax professional.