e-Invoice Outsourcing Services
e-invoicing, or electronic invoicing, is a system where invoices are issued, transmitted, received, and processed electronically. This method of invoicing is becoming increasingly popular as it streamlines the billing process, reduces paper use, and improves efficiency and cash flow. In Malaysia, e-invoicing is part of the government’s efforts to enhance tax administration and support the growth of the digital economy. Eradicating black economy that remain unrecorded in the mainstream economy is also part of the agenda of the government to prevent tax leakages. Generally, e-invoicing offers benefits such as improved accuracy, faster processing time for payments, and better compliance with tax regulations.
At the firm, we offer e-invoicing services as part of our accounting and bookkeeping outsourcing services. Your sales invoices will be validated at our premise on a centralised basis before submission to your respective clients.  Similarly, all purchase invoices will be monitored for its validation before payment. e-Invoicing is mandatory to all taxpayers engaged in all type of businesses either by way of B2B, B2C or B2G from January 2026 onwards (with the exception of businesses with turnover not more than RM150,000) as imposed by Lembaga Hasil Dalam Negeri (LHDN). It comprises of validation of the following documents at near real time basis with LHDN, either via “Application Programming Interface (API)” or MyInvois Portal.
The documents that are required to be validation are:
- Invoice,
- Credit note,
- Debit note,
- Refund note and
- Self billed invoice.
Please refer to the attached flow chart photo of e-Invoice mechanism with LHDN’s portal for further understanding. Further guidance is reflected in Figure 2.2 as below.
Please briefly take note that reimbursement of business expenses to employees will also be requiring e-invoicing validation.  In addition, benefit in kind/perquisites as per pre-existing employment contract or company policy must also be validated. Transactions of non-business related, such as rental of private property between homeowner and tenant, will not be requiring e-invoicing validation with LHDN. Understanding the exemptions of e-Invoicing is equally important with those transactions required for validation under the law.
We encourage business owners to take a pro-active approach to make all the necessary arrangements, such as putting adequate processes and make ready necessary computer software/hardware to support e-invoicing before the January 2026 deadline. Early preparation is recommended to avoid operational disruption when the mandatory reporting comes into force. Failure to issue an e-invoice constitutes an offence under Section 120(1)(d) of the Income Tax Act 1967. Penalties include fines ranging from RM200 to RM20,000 or imprisonment for up to 6 months, or both, for each instance of non-compliance.
At Megat Faizal Musa & Co, we specialize in accounting, bookkeeping and payroll outsourcing services for all industries. Contact us at 010-3812996 or browse our website at www.mfmco.my for more details.
Please contact the below for clarification:
E-mail:Â lee.mf@mfmco.my
Mobile: +6010 381 2996 (Call/WhatsApp)