📖 Article

Malaysia e-Invoice Phase 3 — What to Do Now

📅 26 Jul at 8:55 am
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⏱ 5 min read

🧾 Malaysia · Compliance · Updated July 2026

Malaysia e-Invoice Phase 3: What Every Business Owner Needs to Do Right Now

Phase 3 of Malaysia’s e-invoice mandate went live on 1 July 2025. If your annual turnover exceeds RM 150,000, you are in scope — regardless of business size, industry, or structure. This guide covers exactly what to do.

Phase 3 · Jul 2025

MyInvois · LHDN

All businesses > RM 150K

Penalties up to RM 20,000

What Phase 3 Actually Means

Malaysia’s e-invoice rollout happened in three phases:

Phase	Effective Date	Who Is Covered
Phase 1	August 2024	Annual turnover > RM 100 million
Phase 2	January 2025	Annual turnover RM 25M – RM 100M
Phase 3	1 July 2025	All remaining businesses > RM 150,000

⚠️ The threshold is based on gross annual turnover — not profit. If you invoice RM 200,000 to clients but your costs bring profit to RM 60,000, you are still in scope. Profit is irrelevant to the e-invoice obligation test.

The 5 Things You Need to Do Right Now

Confirm Whether You Are in Scope

If your total revenue from invoicing customers in Malaysia exceeded RM 150,000 in your most recent financial year, you are in Phase 3 scope. Exemptions exist for certain government bodies and specific financial instruments, but the vast majority of registered businesses have no exemption. Use LHDN’s eligibility tool at myinvois.hasil.gov.my if you are unsure.

Register on LHDN’s MyInvois portal using your TIN, SSM/registration number, and MyTax login. The complication arises when businesses discover their TIN is inactive or MyTax records are outdated — sorting this with LHDN takes time. Start now, not the week a compliance audit arrives.

Choose Your Submission Method

Portal (manual): Log into the MyInvois web portal and submit invoices directly. Appropriate for businesses with fewer than 100 invoices per month.

API via accounting software: Your software submits to MyInvois automatically. QnE, AutoCount, SQL Account, and Xero Malaysia all have certified integrations — but you must activate and configure them. They do not work automatically.

PEPPOL access point: Required if your large corporate or government customers specifically request PEPPOL-compliant invoices.

Understand the 72-Hour Rule

Once MyInvois validates your invoice and assigns a UUID, you have 72 hours to cancel if you made an error. After that window, you must issue a credit note or debit note — which itself requires MyInvois validation. This is the most common operational stumbling block in practice. Make sure your finance team understands it before going live.

Know the Penalty Structure

Non-compliance attracts fines of RM 200 to RM 20,000 per invoice, or up to 6 months imprisonment, or both. These are per-invoice penalties — a business issuing 200 non-compliant invoices per month faces potentially significant cumulative exposure. LHDN does not send individual warnings before enforcement.

Common Mistakes Malaysian Businesses Are Making Right Now

✗ Assuming cloud accounting = compliance

Switching to Xero, AutoCount, or QuickBooks does not make you compliant unless the MyInvois API integration is activated and configured. Many businesses use cloud accounting but have never connected it to MyInvois. Their invoices go to customers without a UUID. They are non-compliant.

✗ Using consolidated e-invoices incorrectly

Consolidated e-invoices are permitted only for B2C transactions where the consumer does not request an individual invoice. They must be submitted by the 7th of the following month and cannot be used for B2B transactions. Many businesses are applying them too broadly.

✗ Not knowing how to handle overseas invoices

If work was performed in Malaysia and invoiced by a Malaysian entity, e-invoicing requirements generally apply — even if your client is in Singapore or the UK. The currency of the invoice does not change the obligation.

✗ Waiting for LHDN to contact you

LHDN does not send individual notifications before issuing penalties. The mandate has been public since 2023. Phase 3 came into force on 1 July 2025. Enforcement is active.

Quick Reference: Malaysia e-Invoice at a Glance

Item	Detail
Phase 3 effective date	1 July 2025
Threshold	Annual turnover > RM 150,000
Submission system	MyInvois (myinvois.hasil.gov.my)
Pathways	Portal (manual) · API (software) · PEPPOL
Cancellation window	72 hours after validation
Correction after 72hrs	Credit note or debit note via MyInvois
Penalty per non-compliant invoice	RM 200 – RM 20,000
B2C consolidation deadline	7th of following month

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Common Questions

Does the RM 150,000 threshold apply to profit or turnover?

Gross annual turnover — the total you invoice to customers. Your costs and profit are irrelevant to the e-invoice obligation. A business invoicing RM 200,000 with only RM 60,000 profit is still in scope.

I use Xero / QuickBooks / AutoCount. Am I already compliant?

Only if you have activated and configured the MyInvois API integration within your software. Simply using cloud accounting software does not make you compliant — the software must submit every invoice to LHDN’s MyInvois system for validation and UUID assignment before it is sent to your customer.

What is the 72-hour cancellation window?

Once an e-invoice is validated by MyInvois and assigned a UUID, you have 72 hours to cancel it if you made an error. After that window, you must issue a credit note or debit note — which itself must go through MyInvois validation.

What are the penalties for non-compliance?

RM 200 to RM 20,000 per offence for failure to issue a compliant e-invoice, or up to 6 months imprisonment, or both. These are per-invoice penalties, not annual penalties.

Can I use consolidated e-invoices for all my customers?

No. Consolidated e-invoices are only permitted for B2C transactions where the consumer does not request an individual e-invoice. They must be submitted no later than 7 days after month-end and cannot be used for B2B transactions or specific exempt categories.

Does my business need to use the MyInvois portal or can I use software?

Either is valid. Businesses with low invoice volumes (under 100/month) can use the MyInvois web portal directly. Higher-volume businesses should integrate their accounting software via API. Businesses trading with large corporates may need to use a PEPPOL-accredited access point.