The Inland Revenue Board of Malaysia (IRB) has confirmed that taxpayers with annual income or sales below RM500,000 will be exempted from the implementation of the e-Invoice system.
The decision was made by the IRB because the government took into account the time requirements and implementation challenges faced by taxpayers, especially traders in the micro, small and medium enterprises (MSME) category.
IRB is implementing e-Invoice for taxpayers with income between RM1 million and RM5 million on 1 Jan 2026, while those with income below RM1 million will start on 1 July 2026.
The implementation of the third phase of e-Invoice will start on 1 July involving taxpayers with income or sales exceeding RM5 million to RM25 million.
The fourth and fifth phases respectively involve income exceeding RM1 million to RM5 million (starting 1 Jan 2026), and up to RM1 million (starting 1 July 2026).
A six-month grace period will be used in the new phase to enable taxpayers to issue e-Invoices for all transactions including self-billing.
The IRB also announced that no action will be taken under Section 120 of the Income Tax Act 1967 during the grace period if taxpayers comply with the e-Invoice requirements.
