E-Invoicing in Malaysia: Information & Implementation Guidelines

Key Takeaways

• E-Invoicing will be mandatory in Malaysia by July 2025, rolled out in phases based on business turnover.
• It reduces manual errors, improves payment cycles, and ensures tax compliance.
• Invoices must be submitted in XML or JSON format via the MyInvois portal or API.
• API integration requires secure authentication, format compliance, and encrypted data exchange.
• Early preparation helps businesses avoid penalties and ease the transition to digital invoicing

Introduction

In today’s increasingly digital economy, businesses can no longer afford to rely on manual, paper-based processes—especially when it comes to invoicing. 

The shift toward e-Invoicing is more than just a regulatory requirement; it represents a vital step in improving operational efficiency, reducing compliance risks, and enabling smarter financial oversight.

E-Invoicing automates the end-to-end invoicing workflow—eliminating manual errors, streamlining cash flow, and enhancing business transparency. More than just a digital upgrade, it transforms invoicing into a strategic tool that supports long-term growth and resilience.

Across the globe, governments are embracing e-invoicing to curb tax evasion, promote transparency, and build trusted digital economies. 

Malaysia is no exception. The Inland Revenue Board of Malaysia (IRBM) has rolled out a phased implementation plan, making it essential for businesses to understand and adopt e-Invoicing within stipulated timelines.

In this guide, we’ll break down Malaysia’s e-Invoicing framework, explain key regulatory mandates, and provide actionable steps to help you implement a compliant, future-ready system.

What is e-Invoicing?

E-Invoicing, or electronic invoicing, is the digital exchange of invoice documents between a supplier and a buyer. It removes the need for paper-based invoicing and manual processing.

With e-Invoicing, businesses can:

• Reduce human errors
• Improve cash flow management
• Cut costs linked to printing and mailing
• Speed up invoice approvals
• Comply with local and global tax rules
• Avoid penalties for non-compliance
• Lower their environmental footprint

E-Invoices are created in standard digital formats. This allows for automatic delivery and easy integration with accounting systems. It also supports real-time validation and faster processing.

Many governments, including Malaysia’s, are encouraging e-Invoicing to fight fraud and boost transparency. It’s more than just an upgrade—it’s a key part of digital transformation.

By using e-Invoicing, companies can save time, reduce risk, and focus on high-value tasks instead of admin work.

Traditional invoicing vs. e-Invoicing

Traditional invoicing relies on manual processes. This includes creating, printing, and posting physical invoices. It takes time, costs more, and is prone to errors.

e-Invoicing replaces these steps with automation. Invoices are created, sent, received, and stored digitally. This speeds up the process and reduces the chance of mistakes.

Unlike paper invoices, e-Invoices follow a standard format. They can be processed instantly by accounting systems. This improves efficiency, lowers costs, and helps ensure compliance with tax regulations.

In short, traditional invoicing is slow and manual. e-Invoicing is faster, smarter, and built for modern businesses.

What types of businesses are required to use e-Invoicing?

All businesses engaging in B2B, B2C, or B2G transactions will eventually need to adopt e-Invoicing, based on annual revenue thresholds.

It starts with companies earning over RM 100 million from 1 August 2024, followed by those earning RM 25–100 million from 1 January 2025, and finally all other taxpayers from 1 July 2025.

Micro-businesses earning below RM 150,000 are currently exempt.

Benefits of e-Invoicing

Switching to e-Invoicing offers a wide range of benefits for businesses across all sectors. These include:

• Lower operational costs – Save on printing, postage, and physical storage.
• Fewer errors – Automated data entry reduces mistakes and duplications.
• Faster payments – Speed up approval and payment cycles with real-time processing.
• Better compliance – Meet regulatory standards more easily with audit-ready records.
• Improved efficiency – Free up staff to focus on more valuable tasks.
• Greater security – Digital signatures and encryption help prevent fraud.
• Eco-friendly – Cut down on paper use and support sustainability goals.
• Seamless integration – Sync with existing accounting or ERP systems for smoother workflows.
• Stronger supplier relationships – Reliable and timely invoicing builds trust.
• Reduced risk of data loss – Digital storage protects your records from physical damage or misplacement.

e-Invoicing is not just a cost-saving measure. It is a smart move that supports digital growth, financial visibility, and long-term resilience.

Overview of e-Invoicing in Malaysia

Malaysia is moving towards a fully digital economy, and e-Invoicing plays a key role in this shift. The initiative supports goals outlined in the 12th Malaysia Plan (2021–2025), which focuses on strengthening digital infrastructure and modernising tax administration.

The e-Invoicing rollout began with a pilot programme on 1 May 2024. The first mandatory phase followed on 1 August 2024, targeting businesses with an annual turnover of over RM 100 million.

Next, businesses with yearly sales between RM 25 million and RM 100 million must adopt e-Invoicing by 1 January 2025. Full implementation for all other taxpayers will take place by 1 July 2025.

To support the rollout, the Inland Revenue Board of Malaysia (IRBM) and the Malaysia Digital Economy Corporation (MDEC) are working together to ensure businesses understand and meet the new requirements.

The IRBM has released clear technical guidelines for submitting e-Invoices through the MyInvois portal or via API integration. These steps aim to increase transparency, ensure proper tax reporting, and promote digital readiness.

The framework also encourages compatibility across different accounting systems, helping businesses operate more efficiently in a digital-first landscape.

Malaysia’s e-Invoicing Guidelines

Malaysia’s e-Invoicing framework outlines specific technical and regulatory requirements to ensure consistency and compliance across all businesses.

To meet these standards, companies must:

• Generate e-Invoices in XML or JSON format.
• Submit invoices through the MyInvois portal or via API integration.
• Ensure each e-Invoice includes key details such as:
  • Supplier and buyer information
  • Unique invoice number
  • Transaction date
  • Item description, quantity, and price (excluding tax)
  • Tax amount
  • Total payable amount

In line with international standards, all e-Invoices must follow the Universal Business Language (UBL) 2.1 format. They must also carry a digital signature to verify authenticity and ensure data integrity.

Businesses are required to store e-Invoices for at least seven years for audit and compliance purposes.

During the initial phase, consolidated invoices may be issued under certain conditions. This helps ease the transition and reduce the burden on businesses handling large volumes of transactions.

To ensure smooth adoption, staff must be trained on the new process and systems. Understanding the regulatory landscape and technical requirements is essential for full compliance and long-term success.

Important timelines for implementation and penalties for non-compliance

Malaysia’s e-Invoicing rollout follows a phased timeline based on business turnover:

• 1 August 2024 – Mandatory for businesses with annual turnover above RM 100 million
• 1 January 2025 – Mandatory for businesses earning RM 25 million to RM 100 million
• 1 July 2025 – Mandatory for all other taxpayers

To support a smooth transition, the IRBM is offering a six-month grace period from each mandatory start date. During this period, businesses may issue consolidated e-Invoices for all transactions. This helps ease operational pressure and encourages early adoption.

However, failure to comply after the grace period can lead to serious consequences. Under Section 120(1)(d) of the Income Tax Act 1967, businesses may face:

• Fines between RM 200 and RM 20,000
• Imprisonment of up to 6 months, or both

To avoid penalties, it’s critical to start preparing your invoicing systems and processes early. Engaging the right technology partner can help reduce risks and ensure compliance from day one.

What is the grace period for e-Invoicing in Malaysia?

The grace period is six months from each mandatory start date. No penalties will be applied during this time if businesses issue consolidated e-Invoices and show intent to comply.

Government API for e-Invoicing

The Government API is a central part of Malaysia’s e-Invoicing system. It acts as a bridge between a business’s internal systems and the MyInvois platform, managed by the IRBM.

This API enables real-time communication, allowing invoices to be generated, submitted, and validated automatically. It reduces manual work, speeds up processing, and ensures full compliance with local tax rules.

Key features of the Government API include:

• Real-time validation – Invoices are checked instantly for accuracy and completeness.
• Data security – Strong encryption protects sensitive financial information during transmission.
• Format flexibility – The API supports both XML and JSON to suit different systems.
• Integration-ready – Easily connects with most accounting, billing, or ERP platforms.

By using the API, businesses can automate invoicing tasks, reduce delays, and lower the risk of human error. This is especially useful for organisations handling large transaction volumes.

At Mandrill, we help businesses integrate the Government API seamlessly—ensuring your systems are not only compliant, but also future-proof.

How secure is the Government API for e-Invoicing?

The Government API uses industry-standard encryption, token-based authentication, and digital certificates to protect financial data.

Only authorised users can submit or access invoice data, and regular audits help maintain system integrity and security.

Advantages of using e-Invoicing with Government API

Integrating your system with the Government e-Invoicing API provides significant advantages for businesses looking to scale, automate, and stay compliant:

• Real-time validation: Invoices are checked instantly, reducing delays and manual corrections.
  
• Improved tax compliance: Automatic submissions help meet IRBM’s regulatory requirements with less effort.
  
• Faster invoicing and payments: Electronic submission speeds up approval cycles, improving cash flow.
  
• Stronger data security: Encrypted data transfers and digital signatures protect sensitive financial information.
  
• Lower operational costs: Automation reduces paper use, manual entry, and administrative overhead.
  
• Audit-ready records: All transactions are logged with a clear trail, supporting transparency and dispute resolution.
  
• Less burden on finance teams: Routine tasks are automated, freeing teams to focus on higher-value activities.

How to implement e-Invoicing in your business?

Switching to e-Invoicing requires careful planning and the right tools. Here’s a step-by-step approach to guide your implementation:

1. Assess your current invoicing process: Identify pain points, manual tasks, and system limitations. Understand how many invoices you handle and your compliance obligations.
   
2. Choose the right e-Invoicing provider: Look for a solution that matches your business needs. Consider features like API integration, user-friendliness, scalability, and compliance readiness.
   
3. Set up and configure your system: Align your invoicing platform with Malaysian requirements. Ensure it supports the correct formats (XML/JSON) and integrates with your ERP or accounting software.
   
4. Clean and migrate your data: Review existing invoice records. Remove duplicates, correct errors, and prepare clean data for the new system.
   
5. Run internal testing: Send test invoices to internal teams. Check system accuracy, automation flows, and processing times before going live.
   
6. Train your staff: Educate employees on how to use the new platform. Training should cover workflows, security measures, and common issues.
   
7. Ensure data security: Choose a platform that complies with data protection standards. Protect sensitive financial data with encryption and access controls.
   
8. Monitor and optimise: Track KPIs such as error rates and processing time. Use this data to fine-tune your processes.
   
9. Notify your partners: Let your customers and suppliers know you’re moving to e-Invoicing. Share timelines and updated procedures.
   
10. Stay up to date: Monitor regulatory updates from IRBM. Make sure your system evolves with the latest compliance rules and tech requirements.

Integrating the Government API with your company invoicing system: A step-by-step guide

Connecting your invoicing system to the MyInvois platform via the Government API ensures real-time, compliant invoice submission. 

Here are the detailed stops to integrate effectively:

1. Register on the MyInvois Portal: Create an account with the IRBM by providing your company’s tax ID and registration number.
2: Request API credentials: After registration, apply for your Client ID and Client Secret—these are required for secure access to the API.
3. Review API documentation & SDK: Use IRBM’s API documentation and SDK to understand how to integrate features like invoice submission, status checks, and validation.
4. Set up authentication: Implement OAuth 2.0 token-based authentication using your client credentials. This secures all interactions with the API.
5. Configure sandbox & production environments: First, test all functions in the sandbox environment. Once validated, configure the production setup using the provided endpoints.
6. Ensure format compliance: Your system must generate e-Invoices in UBL 2.1 XML or JSON format. This ensures proper validation and acceptance by the government system.
7. Encrypt data transfers: Apply end-to-end encryption for all invoice data sent through the API to meet security requirements.
8. Run full integration testing: Submit test invoices, validate results, and troubleshoot any errors within the sandbox before moving live.
9. Deploy and monitor: Once tested, switch to production. Continuously monitor error rates, processing time, and system performance.

Challenges businesses might face and how to overcome them?

While e-Invoicing brings many benefits, businesses may face a few hurdles during implementation:

• Limited IT infrastructure: Many SMEs may lack systems that support XML/JSON formats or secure API connections.
  
• Lack of internal expertise: Teams unfamiliar with e-Invoicing may struggle with setup and compliance.
  
• Employee resistance to change: Staff may be hesitant to adopt new workflows, especially if they are used to manual processes.
  
• Data migration concerns: Poor data quality or inconsistent records can complicate integration.

By partnering with a technology provider like Mandrill, businesses can overcome these challenges confidently—gaining a system that’s not only compliant but also built for long-term growth and automation.

Mandrill’s Digital Innivation and other services are ideal for building secure, API-ready e-Invoicing systems that integrate seamlessly with your existing workflows.

Conclusion

e-Invoicing marks a major shift in how businesses operate—replacing manual, paper-based workflows with streamlined, automated processes. Beyond regulatory compliance, it improves visibility, accelerates payment cycles, and reduces operational risks.

Malaysia’s phased approach to e-Invoicing gives businesses time to adapt—but the earlier you begin, the smoother your transition will be. By aligning your invoicing systems with IRBM’s framework and leveraging API integration, you can unlock greater efficiency and long-term scalability.

At Mandrill, we help companies simplify this transformation through secure, integration-ready platforms and business intelligence solutions. 

Whether you’re looking to upgrade your invoicing system, connect to the Government API, or train your team for compliance—we’re here to help you stay ahead!