e-Invoicing Deadline Extended: IRBM Offers Six-Month Grace Period

Malaysia’s e-invoicing rollout includes a six-month interim e-invoicing relaxation period after each phase’s mandatory start date. Introduced by the Inland Revenue Board of Malaysia (IRBM) on 26 July 2024, this measure ensures a smooth transition and serves as a grace period, allowing businesses to adapt before full enforcement gradually.

During this time, newly mandated businesses using the e-invoice system have flexibility in compliance. Instead of issuing an IRBM validated e-invoice for every transaction immediately, they can submit a single consolidated e-invoice per month covering all transactions. 

This guide explains the relaxation period in e-invoicing Malaysia, its timeline, benefits, and the overall impact on businesses.

What is the E-Invoicing Relaxation Period?

The E-Invoicing Relaxation Period refers to a six-month grace period after the mandatory e-invoicing implementation date for each group of taxpayers. During this period, businesses are required to comply with e-invoicing, but with relaxed requirements, such as:

1. Consolidated E-Invoices: Instead of issuing one invoice per transaction, businesses can issue one e-invoice per month summarizing all transactions. Self-billed e-invoices (where buyers generate invoices on behalf of suppliers) can also be consolidated monthly.
2. Flexibility in Invoice Details: Some fields, such as transaction reference numbers, can be omitted. Businesses are allowed to input general product descriptions instead of detailed line items.
3. No Immediate Penalties: Businesses will not face fines or enforcement actions under Section 120 of the Income Tax Act 1967 for not fully complying, provided they submit at least the monthly consolidated e-invoice within seven days after month-end.
4. Buyers’ Requests for E-Invoices: Businesses do not have to issue separate e-invoices for each transaction upon request during the relaxation period. Instead, buyers will receive the monthly consolidated invoice.

This transition period aims to ease businesses into full e-invoicing compliance, reducing disruptions and allowing them time to adapt their invoicing systems.

E-Invoicing Implementation Timeline & Relaxation Period

The Inland Revenue Board of Malaysia (IRBM) released updated e-invoice Guidelines in 5th June 2025, introducing significant changes to the e-invoicing implementation timeline and relaxation period. The latest framework introduces five distinct phases with revised annual turnover thresholds, and each phase is provided a six-month grace period before strict enforcement begins.

Note: Implementation is based on your FY2022 audited accounts or tax return, as specified by IRBM. For businesses with annual turnover below RM500,000, e-invoicing is not mandatory under the latest exemption rules. 

Why Was the Relaxation Period Introduced?

The government introduced the interim relaxation period to ensure a smooth transition for businesses. The key reasons include:

• Time to upgrade systems – Businesses need time to integrate their accounting or ERP systems with the IRBM’s MyInvois platform.
• Reduce compliance burden – Simplifies the initial phase of e-invoicing, especially for businesses handling large transaction volumes.
• Avoid penalties for initial mistakes – Ensures businesses are not penalized for system errors or implementation challenges.
• Encourage voluntary adoption – Businesses can test and refine their e-invoicing processes before strict enforcement begins.

Benefits of Early E-Invoicing Adoption

Businesses that start early stand to comply fully with the e-invoicing mandate instead of opting for relaxed compliance gain multiple advantages:

• Tax Incentives for Early Adopters: Businesses that adopt e-invoicing within their scheduled phase qualify for an accelerated capital allowance on related technology investments. This allows ICT equipment/software costs to be written off over 2 years instead of 3, offering faster tax relief (available until the 2025 tax year).
• Better Preparedness and Smoother Transition: Early adoption gives businesses time to troubleshoot, adapt, and train staff without last-minute pressure. Ensures compliance before full enforcement, reducing the risk of technical issues or rejected invoices.
• Avoiding Compliance Pitfalls: Prevents rushed last-minute adoption that could lead to non-compliance and penalties. Early adopters provide feedback to the IRBM, helping refine the system while support resources are still available.

Impact of the Relaxation Period on Businesses

The relaxation period has had a significant impact on e-invoicing adoption in Malaysia:

• Increased participation – Over 17,000 taxpayers have started using e-invoicing, with 4,900 businesses voluntarily opting in before their deadline.
• Improved compliance – Businesses have been able to identify challenges and resolve them early, reducing the risk of penalties after the grace period ends.
• Challenges for SMEs – Smaller businesses, especially those without dedicated IT teams, face difficulties in adopting e-invoicing and may require further support.

Conclusion

The E-Invoicing Relaxation Period in Malaysia is a transitional mechanism designed to support businesses as they shift to digital invoicing. By offering a six-month grace period with simplified compliance, the government ensures a smoother adoption process while promoting digital tax administration. Businesses that start early stand to gain tax incentives, efficiency, and compliance readiness. As each phase progresses, companies should take advantage of this period to integrate their systems and avoid last-minute challenges.

For more details, refer to IRBM’s official guidelines or download the E-Invoicing Specific Guidelines PDF.