In line with Malaysia’s ongoing tax digitalization initiatives, the e-Invoicing regime has been established as a central element of tax administration reform. Through the MyInvois portal, the issuance, receipt, and submission of electronic invoices have been progressively standardized, enhancing transparency, data integrity, and audit oversight.

To further strengthen regulatory oversight, the Inland Revenue Board of Malaysia (IRBM) implemented the Compliance Review Framework for e-Invoicing (Malay) effected from 15 December 2025, signaling a shift from system adoption to a structured, auditable, and enforceable compliance regime.

I. Policy Background and Implementation Timeline

1. Policy Objectives

The e-Invoicing regime is designed to:

• Standardize and digitalize tax-related invoicing processes.
• Enhance transparency and audit efficiency.
• Mitigate risks of tax leakage and misreporting through system-based validation; and
• Streamline corporate tax filing and subsequent audit procedures.

Electronic invoices submitted through the MyInvois Portal are validated by IRBM and assigned a Unique Identification Number (UIN) together with a QR code, confirming their status as legally recognized tax documents.

2. Phased Implementation Timeline

Malaysia has adopted a phased implementation approach based on annual turnover or revenue, with mandatory implementation dates as follows:

Note: Taxpayers with an annual turnover or revenue of less than RM1 million are exempted from e-Invoice implementation.

II. Use of e-Invoices and Normal Receipts

1. General Principle for e-Invoice Applicability

Within the scope of mandatory implementation, all taxable or revenue-generating transactions are, in principle, required to be invoiced through the MyInvois system. Only e-Invoices that have been successfully validated and assigned a UIN may be treated as official tax documents.

2. Permitted Use of Normal Receipts

The use of normal receipts is not prohibited under the e-Invoicing regime; however, it is subject to clearly defined limitations and is permitted only in specific circumstances, including but not limited to:

• During the applicable grace period (six months following the implementation date), where system integration has not yet been completed.
• In B2C transactions where the customer does not expressly request an e-Invoice.
• Low-frequency and low-value transactions where consolidation or simplified treatment is permitted during the transitional period; and
• Receipts generated through IRBM-approved electronic POS systems or simplified tools.

Normal receipts may serve as proof of transaction or payment but do not, in themselves, constitute compliant e-Invoices.

3. Compliance Restrictions on Normal Receipts

Enterprises should observe the following compliance considerations:

• Normal receipts must not be used as a substitute where e-Invoice issuance is legally required.
• Where a counterparty, particularly a corporate customer, requests an e-Invoice, the supplier is required to issue one through the MyInvois system.
• Revenue associated with normal receipts must be fully recorded in the accounting system and remain traceable to subsequently issued e-Invoices where applicable.
• Systematic or prolonged reliance on normal receipts to avoid e-Invoice obligations is not permitted.

During IRBM reviews, systematic substitution of e-Invoices with normal receipts may be regarded as a compliance avoidance issue.

III. Key e-Invoice Compliance Requirements

1. Invoice Issuance and Data Accuracy

Enterprises are required to ensure that e-Invoices accurately reflect the underlying transactions, including:

• Details of both seller and buyer.
• Transaction date.
• Description, quantity, value, and applicable tax amounts.
• Consistency with contracts, purchase orders, and payment records; and
• Compliance with IRBM-prescribed data fields and formatting standards.

2. Submission and System Management

Enterprises should establish end-to-end processes governing the issuance, submission, correction, cancellation, and replacement of e-Invoices. Submission may be made via:

• Manual upload through the MyInvois Portal; or
• Automated submission through ERP systems or API integration, generating invoices in accordance with IRBM technical specifications.

3. Controls over Corrections and Cancellations

Once validated, e-Invoices must not be deleted or altered arbitrarily. Corrections should be effected through:

• Issuance of a credit note; or
• Issuance of a replacement invoice.

All amendments must be supported by appropriate approval records and system logs to ensure auditability.

4. Consistency with Accounting Records

E-Invoice data must align with the enterprise’s accounting records, including the general ledger, accounts receivable and payable, and revenue recognition. Data inconsistencies may be assessed as internal control deficiencies and increase audit exposure.

5. Retention of Supporting Documentation

Enterprises are required to retain supporting documentation, including contracts, purchase orders, payment records, system logs, and relevant business correspondence, and to ensure such records are readily accessible during tax audits.

6. Voluntary Disclosure of Historical Issues

Where historical non-compliance or errors are identified, enterprises are encouraged to proactively disclose and rectify such matters with IRBM. Voluntary disclosure may assist in mitigating audit risks and potential penalties.

IV. Key Areas of Focus in IRBM Compliance Reviews

IRBM compliance reviews typically focus on:

• Whether e-Invoices have been issued in accordance with the applicable implementation phase.
• Whether normal receipts have been improperly used in place of e-Invoices.
• Consistency between invoice data, accounting records, and transactional documentation.
• Adequacy of correction, cancellation, and replacement controls.
• Effectiveness of internal controls, system governance, and record-keeping; and
• Timely rectification and disclosure of historical non-compliance.

V. Compliance Risks and Potential Consequences

1. Tax Audits and Investigations

Irregularities in the use of e-Invoices or normal receipts may trigger targeted or extended tax audits.

2. Tax Adjustments and Back Taxes

Systemic non-compliance may result in tax adjustments, additional assessments, and overdue payment.

3. Internal Control Deficiency Assessment

Persistent or repeated breaches may be assessed as deficiencies in internal control or tax governance, potentially increasing future audit risk ratings.

Triide Perspective

As Malaysia’s e-Invoicing regime becomes fully embedded, corporate tax compliance is increasingly shaped by process integrity, internal control effectiveness, and data governance maturity. Professional advisory support with local regulatory insight and implementation experience can play a vital role in supporting robust compliance frameworks.

Where interpretative or implementation considerations arise in relation to e-Invoice applicability, the compliant use of normal receipts, or audit readiness, Triide is ready to support the effective implementation and ongoing governance of e-Invoicing obligations under Malaysia’s regulatory framework. Please email gofurther@triide.com to reach out to our expert.