LHDN E-Invoice Malaysia: The Complete Guide (2025)
The Inland Revenue Board of Malaysia (LHDN) is implementing a mandatory e-Invoicing system to digitize tax administration. This shift impacts every business in Malaysia, from large enterprises to micro-SMEs. This guide explains what you need to know, the timeline for compliance, and how to prepare.
What is LHDN E-Invoice?
An e-Invoice is a digital file (in XML or JSON format) that represents a transaction between a supplier and a buyer. Unlike a PDF or paper invoice, an e-Invoice contains structured data that can be automatically read by computer systems.
Key Characteristics:
- Real-time Validation: Invoices are validated by LHDN immediately upon issuance.
- Digital Signature: Ensures the authenticity and integrity of the document.
- Unified Format: Standardized data structure for all businesses.
Implementation Timeline
LHDN is rolling out e-Invoicing in phases based on annual revenue. Use our interactive tool below to check your specific date:
Detailed Schedule
| Phase | Target Group | Implementation Date |
|---|---|---|
| 1 | Revenue > RM100 Million | 1 August 2024 |
| 2 | Revenue > RM25 Million | 1 January 2025 |
| 3 | All Taxpayers | 1 July 2025 |
Note: Businesses can opt-in earlier than their mandatory date.
How It Works: The Workflow
- Generation: Supplier generates an e-Invoice using compliant software.
- Validation: The invoice is sent to LHDN via API for near real-time validation.
- Notification: LHDN validates the file and notifies both supplier and buyer.
- Sharing: Supplier shares the validated e-Invoice (with QR code) to the buyer.
- Storage: Both parties store the validated e-Invoice for audit purposes.
Submission Methods
There are two ways to submit e-Invoices to LHDN:
1. MyInvois Portal (Manual)
- Best for: Micro-businesses with very low transaction volume.
- Process: Log in to the LHDN portal and manually key in invoice details.
- Pros: Free to use.
- Cons: Time-consuming, prone to human error, not scalable.
2. API Integration (Automated)
- Best for: SMEs and large enterprises with regular transaction volume.
- Process: Your accounting software connects directly to LHDN's system.
- Pros: Fully automated, reduces errors, seamless workflow.
- Cons: Requires compliant software (like QNE AI Cloud).
Why QNE AI Cloud is the Best Choice for E-Invoicing
QNE AI Cloud is natively designed for the Malaysian market and is fully ready for LHDN e-Invoicing.
- Peppol Ready: As a Peppol-compliant provider, QNE ensures secure and standard-compliant document exchange.
- Automated Submission: Invoices are sent to LHDN automatically—no manual portal entry required.
- Error Validation: The system checks for errors before submission to prevent rejection.
- QR Code Generation: Automatically embeds the required LHDN validation QR code on your invoices.
Getting Prepared
- Check Your Timeline: Determine which phase your business falls into.
- Update Your Data: Ensure customer Tax Identification Numbers (TIN) and registration numbers are accurate.
- Choose the Right Software: Upgrade to a cloud accounting solution like QNE that supports API integration.
- Train Your Team: Educate your staff on the new workflow and requirements.
Frequently Asked Questions
Ready for e-Invoicing?
Don't wait until the last minute. Get compliant today with QNE AI Cloud's automated e-Invoice solution.
David Cheah
Senior Financial Systems AnalystDavid is a chartered accountant (MIA) with over 15 years of experience in Malaysian SME financial systems. He specializes in digital transformation, e-Invoice compliance, and cloud accounting migration. His independent reviews help businesses navigate the complex landscape of accounting software in Malaysia.