E-Invoicing Malaysia: Your Top 9 Focused Questions Answered

E-Invoicing Malaysia: Your Top 9 Focused Questions Answered

Introduction of E-Invoicing Malaysia


In today’s digital age, businesses around the world are embracing technological advancements to streamline their operations and enhance efficiency. One such advancement is the implementation of electronic invoicing, commonly known as e-invoicing. This innovative approach to invoicing has gained significant traction in Malaysia, revolutionizing the way businesses exchange invoices and reducing the burden of traditional paper-based processes. In this article, we will delve into the world of e-invoicing in Malaysia through top 9 questions about implementation of E-Invoicing in Malaysia.



What is E-Invoicing Malaysia?


E-invoicing, or electronic invoicing, is a process that involves the electronic exchange of invoices between suppliers and buyers. Unlike traditional paper-based invoicing, which is time-consuming and prone to errors, e-invoicing streamlines the entire invoicing process, from creation to payment. In Malaysia, the adoption of e-invoicing aims to create a more efficient and accurate invoicing ecosystem, benefitting businesses of all sizes.


E-Invoicing goes beyond the conventional human-readable PDF invoice. It operates in a machine-readable format. When it comes to Malaysia’s LHDN e-Invoicing system, only machine-readable XML and JSON files are accepted, while formats like PDF, DOC, JPEG, or emails are not recognized.


Each invoice undergoes a meticulous approval and validation process by the Inland Revenue Board (IRB) before it’s authorized for customer use. This validation procedure encompasses elements like the Tax Identification Number (TIN) and the adherence to e-Invoice data structures and formatting guidelines. Once the e-Invoice clears the validation, the supplier is responsible for sharing the approved version with the buyer. This is done by integrating the validated link, provided by the IRB, into the e-Invoice as a QR code. This QR code serves as a validation tool to confirm the legitimacy and status of the e-Invoice via the MyInvois Portal.

What information is stored in the database of IRB Malaysia for E-Invoicing Malaysia?


The IRBM Database will store essential information from each invoice, ensuring its authenticity, integrity, and traceability. This information is not only vital for verification but can also aid tax authorities in validating the accuracy of tax returns.


Key Categories of Information include:


1. General Details:
  • Invoice number
  • Type and purpose of e-Invoicing
  • Date of e-Invoicing (current date)
2. Supplier & Customer Information:
  • Supplier and customer’s Tax Identification Number (TIN)
  • Name, address, email of both parties
  • 5-digit MSIC code with description
  • Website details
  • Contact person and contact number
  • Company registration number, individual myKad number, or passport
  • SST registration number
  • Currency and exchange rate
3. Item Details:
  • Description, quantity, unit of measurement (uom)
  • Unit price, discount rate, and discount amount
  • Tax type, tax code, tax rate, and tax amount
  • Tariff code
  • Subtotal, total excluding tax, and total including tax for each item
4. Validation Information:
  • IRB Malaysia Unique Identifier Number
  • Validation date and time
  • Validation status of the invoice
5. Digital Certificates / Signature:
  • Taxpayers will receive digital certificates to attach digital signatures to e-Invoices. This signature verifies the origin of submitted e-Invoice data from a specific taxpayer.
6. Optional Additional Information:
  • Payment mode and terms
  • Supplier’s bank account details
  • Payment amount and date
  • Payment reference number
  • Bill reference number
  • Other pertinent details


By encompassing these details, the IRB Malaysia Database ensures a comprehensive record of each e-Invoice, bolstering transparency, accuracy, and compliance.

What is the overview of e-invoice workflow?


What are the benefits of adopting E-Invoicing in Malaysia?


  1. Enhanced Efficiency: E-invoicing eliminates the need for manual data entry and reduces the chances of errors. This leads to quicker processing times, allowing businesses to allocate resources more effectively.
  2. Cost Savings: By eliminating paper, printing, and postage costs associated with traditional invoicing, businesses can significantly reduce their operating expenses.
  3. Faster Payments: E-invoicing expedites the payment cycle. With invoices delivered electronically and accurately, the time between sending an invoice and receiving payment is shortened.
  4. Reduced Environmental Impact: Going paperless with e-invoicing contributes to a greener environment by reducing paper waste and energy consumption.
  5. Compliance and Accuracy: E-invoicing systems often have built-in validation checks, ensuring that invoices comply with regulatory requirements and reducing the likelihood of errors.

What is the framework of e-invoicing for Malaysia?


The landscape of business transactions in Malaysia is undergoing a significant shift with the introduction of e-Invoicing. This innovative approach promises streamlined processes, improved efficiency, and cross-border compatibility. At the heart of this transformation lies the Peppol e-Invoicing framework, chosen for its maturity, interoperability, and robust standards.


Peppol, or Pan-European Public Procurement Online, isn’t just a framework; it’s a set of technical specifications that bridges existing eProcurement solutions and ERP systems. This convergence facilitates seamless communication between diverse systems, transcending borders and fostering international collaboration. The framework’s key advantages include effortless interoperability, vendor flexibility, and global recognition. Peppol’s success spans over 20 countries, propelled by OpenPeppol, a non-profit association committed to maintaining standards.


In Malaysia, the adoption of Peppol signifies a future of enhanced efficiency, smoother transactions, and international connectivity. As the nation embraces this revolutionary framework, the business landscape is set for a standardized, efficient, and collaborative future.


In conclusion, e-Invoicing’s integration with the Peppol framework marks a new era in Malaysian business. Efficiency, standardization, and cross-border compatibility take center stage, empowering businesses for a dynamic and interconnected future.

Which existing Accounting Software / ERP in the market has e-invoicing Malaysia?


Mostly used by smaller and medium companies/businesses such as: Xero, SQL, Autocount, ABSS, Censof, Sage, Esker and many more.


For example, Xero already implemented E-Invoicing in multiple countries, e.g Singapore which is our neighbour country to implement E-Invoicing using Peppol framework, enabling sending and receiving e-invoices. Xero creates the positive impacts on businesses in issuing invoice efficiently, bills sent into Xero, and improve prompt payments.


Mostly used by large multinational companies/businesses such as: SAP, Oracle, IBM and many more.

When is the implementation timeline of E-Invoicing?


The introduction of e-Invoice will occur through a strategic phased approach, ensuring a seamless transition. The deployment of e-Invoice has been meticulously strategized, factoring in turnover and revenue thresholds, allowing businesses ample time to acclimate to the new system. Presented below is the chronological roadmap for the implementation of e-Invoicing.



StageTargeted TaypayerTimeline
1Taxpayers with an annual turnover or revenue of more than RM100 million1st Aug 2024
2Taxpayers with an annual turnover or revenue of more than RM25 million and up to RM100 million1st Jan 2025
3All other taxpayers1st Jul 2025


However, voluntary opt-in is available for any size of business entity earlier.

Are there any challenges or potential pitfalls businesses should be aware of when transitioning to E-Invoicing in Malaysia?


Transitioning to E-Invoicing in Malaysia brings transformative benefits, but businesses must also navigate certain challenges. Ensuring proper integration with existing systems, training staff to handle the new process, and addressing potential technical issues are essential. Compliance with regulatory standards and data security measures is critical to avoid legal complications. 


Moreover, the adjustment period may require businesses to invest time and resources in adapting to the new workflow.


However, proactive planning, collaboration with trusted E-Invoicing service providers, and leveraging available resources can help businesses overcome these challenges and reap the long-term rewards of streamlined operations and enhanced efficiency.

What are the positive impacts of E-Invoicing on the Business Landscape?


The adoption of e-invoicing in Malaysia has far-reaching implications for businesses and the overall economy:


  1. SME Empowerment: Small and medium-sized enterprises (SMEs) often face challenges in adopting advanced technologies. E-invoicing levels the playing field by providing them with access to efficient invoicing processes that were once reserved for larger corporations.
  2. Enhanced Competitiveness: Businesses that embrace e-invoicing can streamline their operations and focus on core activities. This enhanced efficiency contributes to improved competitiveness in both local and global markets.
  3. Cash Flow Management: E-invoicing’s faster payment cycle enhances cash flow management, allowing businesses to allocate resources more effectively and invest in growth opportunities.
  4. Data-Driven Insights: E-invoicing generates digital data that businesses can analyze to gain insights into their financial transactions. These insights can inform strategic decisions and improve business operations.



E-invoicing is a game-changer for businesses in Malaysia, reshaping the way transactions are conducted and boosting efficiency across industries. The Malaysian government’s initiatives to promote e-invoicing, such as the MyDATA program, reflect a commitment to embracing digital transformation. As more businesses adopt e-invoicing, the nation’s economy stands to benefit from increased competitiveness, improved cash flow, and a reduced environmental footprint. The journey towards a paperless invoicing future has begun, and Malaysia is at the forefront of this exciting transformation.

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