By KYN AI Advisory Team — AI implementation specialists, Singapore
Malaysia's e-invoice system, MyInvois, is run by the Inland Revenue Board (LHDN) and has been phased in by annual turnover, largest businesses first. LHDN's June 2025 statement, as reported by the New Straits Times, set the last three phases: above RM5 million to RM25 million on 1 July 2025, above RM1 million to RM5 million on 1 January 2026, and up to RM1 million on 1 July 2026. Businesses below RM500,000 were exempt in that statement. If your SME is in the last two groups, the deadline has passed or is now. This article covers what to check and in what order.
Which phase is your business in?
The phase depends on annual income or sales. The June 2025 statement, as reported, gives:
| Annual income or sales | Start date | |---|---| | Above RM5 million to RM25 million (Phase 3) | 1 July 2025 | | Above RM1 million to RM5 million (Phase 4) | 1 January 2026 | | Up to RM1 million (Phase 5) | 1 July 2026 | | Below RM500,000 | Exempt |
Earlier phases covered larger companies and are not repeated here.
Two cautions. First, the exemption threshold may have changed since that statement, and secondary sources describe a later increase. We could not confirm a revision on LHDN's own site in this check, so treat RM500,000 as the figure in the June 2025 statement and verify the current one on the LHDN e-invoice pages. Second, "annual income or sales" has a defined reference year in LHDN's guideline. Confirm which year applies to you.
What changed during the relaxation period?
The same statement describes a six-month grace period for each new phase. In that period, taxpayers could issue consolidated e-invoices, including self-billed ones, for all transactions, and LHDN would not prosecute under Section 120 of the Income Tax Act 1967 for non-compliance if the consolidated requirements were followed.
The report states that, from 1 January 2026, taxpayers must issue an e-invoice for every sale of goods or provision of services above RM10,000, and that consolidated e-invoicing no longer applies. The article does not spell out how the six months line up with each phase start, so read LHDN's current guidance for your group.
For planning, assume the grace period is over. Your system must produce an individual e-invoice per qualifying transaction and, where allowed, consolidated ones for smaller items.
What does an SME need to produce an e-invoice?
Think in terms of data, not forms.
- Seller data. Legal name, tax identification number, SST registration number if registered, address, contact.
- Buyer data. Name, tax ID, address. For unregistered consumers, a general identifier is used instead. Confirm LHDN's current rule.
- Line data. Description, quantity, unit price, classification code, tax type and rate, discount, total.
- Document data. Invoice number, date and time, currency and exchange rate if foreign, payment terms.
Missing buyer tax IDs cause most rejections. Collect them at onboarding, not at invoicing.
The line-level tax data is the same data your SST return needs. See our primer on Malaysia SST vs GST. One product list with a tax category on each item feeds both.
How do you connect to MyInvois?
There are three common routes.
- The MyInvois portal. You key invoices manually. This suits low volumes.
- Accounting software with built-in support. The vendor submits for you. Check that your version supports the current LHDN guideline and your document types: invoices, credit notes, debit notes, refund notes and self-billed invoices.
- Direct API integration. Your own system or a custom build submits to the MyInvois API. This suits higher volumes or non-standard billing, such as usage charges, project milestones or invoices raised from an operations system.
Choose by volume and by how many systems raise invoices. If invoices come from three places, one submission layer in front of all three is simpler than three vendor add-ons.
A 30-day plan for the last phase
- Week 1: inventory. List every place an invoice is created: accounting software, point of sale, spreadsheets, a custom tool. Count monthly volumes for each.
- Week 1: data audit. Export customers from the last 12 months. Mark missing tax IDs, mismatched names, and missing addresses.
- Week 2: classification. Assign a classification code and tax category to every product and service.
- Week 2: route choice. Portal, vendor or API per source of invoices.
- Week 3: test. Use LHDN's pre-production environment where available. Submit samples of each document type, including a credit note and an invoice in foreign currency.
- Week 3: rejection handling. Decide who reads a rejection, how quickly, and how a corrected document is reissued.
- Week 4: go live. Run parallel for a week. Compare submitted documents with ledger entries every day.
What should run daily after go-live?
- Documents submitted against documents created: any gap is listed.
- Rejections open for more than one day.
- Documents awaiting buyer action, if you rely on the validation window.
- Credit notes issued against original invoices: each must reference its original.
A daily list of exceptions to a named person takes minutes to read. Keep submission and cancellation behind an approval: cancelling or amending a cleared document should not be a one-click action for the person who raised it.
What are the common mistakes?
- Treating the phase date as the start of preparation. Data cleanup takes longer than the connection. Start with customer records.
- One classification code for everything. Codes describe the item. A wrong code is a data error that repeats on every invoice.
- No owner for rejections. A rejected document that nobody reads is an unissued invoice.
- Foreign currency left unfixed. Record the rate and its source on the document, and use the same source in the ledger.
- Credit notes raised outside the system. A credit note that does not reference its invoice breaks the trail.
What should you ask your accounting software vendor?
- Which LHDN guideline version does the current release support?
- Which document types are supported: invoice, credit note, debit note, refund note, self-billed?
- Where do rejections appear, and who is notified?
- Can you export a list of submitted documents with their validation status?
- What happens to documents raised while the connection is down?
Written answers to these five questions are worth more than a demonstration.
Where KYN fits
KYN builds integrations that run in your own cloud account, with a log of every action and its actor. For invoicing, the pattern is one submission layer in front of every source of invoices, with validation before submission, a daily reconciliation of submitted against created, and named approval for cancellations. A manufacturer client's ledger of 3,309 reconciled rows with zero duplicates follows the same logic.
Preparing for MyInvois takes a 14-day review of your invoicing software, customer data and submission volumes. The connected build ships in under 90 days. See integrations and finance systems.
Frequently asked questions
Is an SME with RM800,000 in sales required to use MyInvois?
Under LHDN's June 2025 statement as reported, the group with income or sales up to RM1 million started on 1 July 2026, with businesses below RM500,000 exempt. At RM800,000 you would be in that group. Confirm the current exemption threshold with LHDN.
Can I still issue consolidated e-invoices?
The report says consolidated e-invoicing is no longer permitted from 1 January 2026 for transactions above RM10,000. Check LHDN's guideline for what remains allowed for smaller, routine transactions.
Do I need an API integration?
Not by default. The portal works at low volume, and many accounting packages submit for you. An API integration helps when invoices come from several systems or in high volume.
Checked 30 October 2026.
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