Malaysia E-Invoicing Phase 2: Deadlines and Compliance Checklist

If you’re a Malaysian SME owner, the phrase “e-invoicing mandate” has probably crossed your desk — and maybe kept you up at night. With Phase 2 of LHDN’s MyInvois rollout now active as of July 2026, the clock is ticking for thousands of Malaysian businesses to get compliant.

Here’s everything you need to know about the deadlines, who’s affected, and exactly what steps to take — no fluff, just actionable compliance guidance.

What Is MyInvois and Why Does It Matter?

MyInvois is LHDN’s (Malaysia’s Inland Revenue Board) national electronic invoicing system. It requires all business-to-business (B2B) transactions to be issued, sent, and stored digitally through LHDN’s platform or approved intermediary solutions. The goal: reduce tax evasion, streamline compliance, and modernise Malaysia’s tax infrastructure.

Phase 1 (August 2024) applied to businesses with annual revenue above RM100 million. Phase 2 — which kicked off July 1, 2026 — now covers companies with revenue between RM25 million and RM100 million.

Phase 3 (July 2027) will bring in all remaining businesses. But if you’re in Phase 2, ignoring this now can mean penalties.

LHDN’s MyInvois portal is the central hub for e-invoice submission and validation.

Phase 2: Key Deadlines You Must Know

Mandatory Compliance Date: 1 July 2026

As of this month, all businesses in the RM25M-RM100M revenue bracket must issue e-invoices for all B2B transactions. There is no extension — LHDN has been clear that the timeline is firm. Non-compliance can result in penalties of up to RM20,000 or 12 months’ imprisonment under the Income Tax Act 1967.

Soft Landing Period: July - September 2026

LHDN has announced a three-month “soft landing” period where they will focus on education and guidance rather than punitive action. Use this window wisely — it’s not a free pass to delay compliance, but rather a grace period to fix errors without penalty.

Full Enforcement: 1 October 2026

Starting October, LHDN will begin active audits and penalty enforcement. Non-compliant businesses can expect compound fines, tax adjustment notices, and in severe cases, legal action.

Your Compliance Checklist: 7 Steps to Get Ready

Most Malaysian accounting software now includes native MyInvois integration — check with your vendor.

Common Pain Points (and How to Solve Them)

Problem: My accounting software doesn’t support MyInvois yet.

Solution: Use LHDN’s free web portal directly. You manually key in invoice details — time-consuming but zero cost. Or migrate to a compliant solution. AutoCount MyInvois Module costs approximately RM800-RM1,200 one-time, which is tax-deductible.

Problem: I deal with small suppliers who can’t handle e-invoices.

Solution: LHDN allows “self-billed” e-invoices. You can issue the e-invoice on behalf of your supplier. Document the arrangement and keep records of their consent.

Problem: My business uses multiple currencies and cross-border transactions.

Solution: MyInvois supports foreign currencies. Ensure your exchange rate is based on LHDN’s published rate for the invoice date. Cross-border B2B transactions are also covered under the mandate.

Cost Breakdown: What Compliance Will Cost Your SME

One major concern SMEs raise is cost. Here’s a realistic estimate:

• LHDN MyInvois portal: Free (manual entry)
• Accounting software upgrade: RM500 - RM2,000 (one-time)
• Third-party e-invoicing service: RM100 - RM500/month
• API integration (custom): RM3,000 - RM15,000 (one-time, if needed)
• Staff training: RM0 - RM500 (use free LHDN webinars)

The Bottom Line

E-invoicing isn’t optional — it’s the law. But it’s also an opportunity. Businesses that digitise their invoicing gain better cash flow visibility, fewer data entry errors, faster payment cycles, and easier tax filing.

The SMEs that start now — during the soft landing period — will have the advantage of time. Those who procrastinate face rushed implementation, costly errors, and potential penalties. The choice is clear.

Bookmark myinvois.hasil.gov.my and start your registration this week.