WHAT IS LHDN E-INVOICING? EVERYTHING MALAYSIAN BUSINESSES SHOULD KNOW

A person writing "Business" on a board

Malaysia is moving towards a new era of digital tax compliance. This change won’t just impact large corporations, it will affect businesses of all sizes, making it essential for business owners to understand what LHDN e-Invoicing means and how to prepare for a smooth transition.

For many business owners, invoicing is already one of those tasks that eats up more time than it should. Hours are wasted chasing missing invoices, fixing small errors that delay payments, or drowning in month-end paperwork.

That’s why LHDN is introducing e-Invoicing, a system that standardises and digitalises the way invoices are issued, validated, and reported. It promises greater transparency, efficiency, and accuracy for everyone involved, while strengthening Malaysia’s overall tax administration. If done right, this could be a relief. A new way of invoicing that reduces errors, cuts down on paperwork, and makes compliance much less stressful.

With tools like Quickin, businesses can make the transition smoothly and even turn compliance into a time-saving advantage.

In this article, we’ll explore everything you need to know about LHDN e-Invoicing: its purpose, requirements, how it works, and the best ways to prepare.

What is LHDN e-Invoicing?

The Inland Revenue Board of Malaysia (LHDN) is Malaysia’s main government agency in charge of tax administration, and it is responsible for making sure individuals and businesses pay the right amount of tax based on the country’s tax laws.

As part of Budget 2024, Malaysia has announced a phased rollout of e-Invoicing, which is the digital version of a traditional invoice. It contains all the same essential details such as supplier and buyer information, description of goods or services, quantity, unit price, and so on. Instead of issuing paper invoices or PDFs that only circulate between businesses and customers, every invoice will now pass through LHDN’s digital platform, known as the MyInvois system.

In simple terms, e-Invoicing is not just about going paperless, it is about creating a nationwide standard for invoicing that enhances transparency and accountability. This game-changing compliance not only will bring benefits to the tax authorities, but it is beneficial for taxpayers and has been adopted by countries all over the world.

Why is LHDN Introducing e-Invoicing?

The move to e-Invoicing is part of Malaysia’s wider digitalisation agenda. Around the world, governments are adopting similar systems to strengthen tax collection, reduce fraud, and streamline reporting.

Benefits for LHDN:

Benefits for businesses:

By adopting e-Invoicing, businesses not only stay compliant, but also gain efficiencies that align with Malaysia’s digital economy goals. In fact, the Twelfth Malaysia Plan highlights digitalising tax administration as a key driver of national growth.

Who Needs to Comply with LHDN e-Invoicing?

Compliance with LHDN e-Invoicing will be rolled out gradually, based on business size. Large taxpayers will be the first to adopt, followed by SMEs, and eventually micro businesses. Over time, every business from established corporations to freelancers and small traders will be required to issue invoices electronically.

Based on the LHDN announcement on 5 June 2025, the timeline for mandatory e-Invoicing in Malaysia by annual turnover/revenue is as follows:

E-Invoicing is mandatory for all businesses and individuals conducting commercial transactions in Malaysia. This includes:

Moreover, e-Invoicing is only required for businesses and individuals that meet the specified turnover thresholds under the phased rollout announced by LHDN. Entities with an annual turnover below RM500,000 are currently exempt from the mandate.

However, exemption should not deter businesses from adopting e-Invoicing early. As more businesses transition to the system, those without e-Invoicing capabilities may face delays or complications in payment processing. Embracing e-Invoicing proactively ensures smoother transactions and stronger business relationships moving forward.

How Does LHDN e-Invoicing Work?

In Malaysia, e-Invoices are processed through LHDN’s MyInvois system. Here’s how it works in practice:

  1. The supplier submits an invoice through their ERP/accounting software via API or uploads it manually through the MyInvois portal.
  2. The invoice then goes through a validation process.
  3. Once approved, the validated e-Invoice is made available to the buyer.
  4. Both the supplier and buyer retain a digital copy for their records.

This process ensures that invoices are accurate, traceable, and compliant with tax regulations. Unlike a simple PDF sent by email, an e-Invoice cannot be altered once validated, which reduces the risk of fraud or human error. The system supports standard invoices, as well as credit notes and debit notes, ensuring all common transaction types are covered.

How Quickin Helps Businesses with LHDN e-Invoicing

Quickin makes e-Invoicing simple by automating the creation and validation of invoices in line with LHDN standards. Instead of spending hours preparing documents, double-checking formats, or worrying about whether your invoice meets compliance rules, Quickin handles it all in the background.

It connects directly with your financial records, which means every invoice you send is accurate, consistent, and always ready for submission, letting you issue invoices with confidence.

Key advantages include:

With Quickin, compliance becomes a straightforward part of daily operations, allowing businesses to focus on growth rather than administration. At the end of the day, this gives business owners peace of mind and frees up valuable time to focus on what really matters, which is running and growing the business.

Best Practices to Prepare for LHDN e-Invoicing

Preparing early is the best way to ensure a smooth transition. Businesses can take several practical steps:

By embedding these practices into operations, businesses will find e-Invoicing less of a burden and more of an opportunity.

Conclusion

LHDN e-Invoicing marks a major change in Malaysia’s tax and business landscape. While the transition may feel overwhelming, it is ultimately a step towards greater efficiency, transparency, and trust in the economy. Businesses that prepare early will not only stay compliant but also enjoy smoother financial processes.

With the right tools, the change can be simple and straightforward. Quickin helps businesses embrace e-Invoicing confidently, making compliance easier and allowing owners to focus on what matters most, which is growing their business.

<
Malaysia's e-Invoice Implementation Timeline: Key Dates & What to Prepare
Are You Ready? Malaysia's e-Invoice Requirements for All Businesses
>