IRB (LHDN) Delays e-Invoice Implementation For Businesses

The Inland Revenue Board (IRB), also known as LHDN,  has recently announced a delayed deadline for businesses with less than RM5 million in annual revenue to implement electronic invoicing or e-invoicing. According to information released by the IRB, this delay is expected to last an additional six months.

The IRB said e-invoicing implementation will be postponed to 1 January 2026 for businesses with an annual revenue of between RM1 million and RM5 million, and to 1 July 2026 for businesses with an annual revenue of between  RM500,000 and RM1 million.

Businesses with annual revenue of below RM500,000 will be exempted from e-invoicing

At the same time, businesses with an annual revenue of below RM500,000 will be exempted from e-invoicing for the time being.

Under the previous schedule, businesses with an annual revenue of between RM500,000 and RM25 million were expected to adopt e-invoicing by 1 July 2025. Businesses with an annual revenue of below RM500,000 were expected to do so by 1 January 2026.

Under the previous implementation schedule, businesses with an annual revenue of between RM500,000 and RM25 million were to adopt e-invoicing by 1 July 2025, and businesses with an annual revenue of below RM500,000 by 1 January 2026.

Businesses with annual revenue between RM5 million to RM25 million to begin e-invoicing on 1 July 2025

Taxpayers with annual revenue of between RM5 million and RM25 million are still scheduled to begin e-invoicing on 1 July 2025.  

The federal tax body, under the purview of the Ministry of Finance, said the ministry made this decision in recognition of micro, small, and medium enterprises (MSMEs), who may require additional time to prepare for the compliance with the mandatory implementation.

In addition to deferring the mandatory implementation deadline, the IRB has also granted a six-month grace period once mandatory implementation comes into effect for each respective phase.

Like the prior grace period provided, the IRB is allowing businesses to issue consolidated e-invoices; input any information in the “Description of Products or Services” field; and issue only a consolidated e-invoice even if a buyer requests separate invoices.

During the aforementioned grace period, businesses will not face enforcement actions under Section 120 of the Income Tax Act 1967 for non-compliance offences, provided they comply with the consolidated e-invoice requirements.

It should be noted that the IRB also states that beginning 1 January 2026, businesses involved in e-invoicing implementation must issue e-invoices for every sale of goods or services exceeding RM10,000, with consolidated e-invoicing no longer permitted.

Read More: Expert’s Guide To e-Invoice Implementation In Malaysia