Incentives for E-invoicing in Malaysia

It has been three months since Malaysia’s initial launch of e-invoicing, with many large companies gradually adopting the system. The government’s six-month grace period is helping companies transition smoothly without facing immediate penalties. E-invoicing is designed to enhance transparency, improve tax reporting accuracy, and reduce tax leakages. To further support adoption, the 2025 Budget introduces incentives to lower integration costs, making e-invoicing more accessible and financially viable for businesses.

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E-invoice Incentives

Malaysia’s 2025 Budget introduces incentives and allowances to drive e-invoicing adoption, focusing on positive reinforcement rather than penalties. These incentives encourage companies to fully integrate e-invoicing into their accounting and ERP systems, such as Goldsoft’s ERP system, which simplifies tax compliance and operational processes as well as reducing costs.

Incentives and grants include:

• Tax Deduction: MSMEs can receive a tax deduction of up to RM50,000 per year of assessment (YA) from 2024 to 2027 for consultation fees related to e-invoicing implementation.
• Capital Allowance: Capital allowance is claimable up to 60% of related costs for the purchase of ICT equipment and computer software packages for the 2024 and 2025 assessment years.

Current e-Invoice Situation

Here is the breakdown on current e-invoicing situation in Malaysia:

1. The phased e-invoicing rollout, which began in August 2024, has seen 7,400 companies issue over 58 million e-invoices according to Malaysia’s Ministry of Finance. Starting with large corporations, the initiative will expand to all businesses by mid-2025.
2. MyInvois app is now available for download on all major platforms, including the App Store (iOS), Google Play (Android), and AppGallery (Huawei). The app includes essential features like profile management and document handling, making it easier for users to manage their e-invoicing needs on mobile devices.
3. Although challenges remain, such as obtaining buyer Tax Identification Numbers (TINs) and navigating the MyInvois portal, IRB has responded with resources, including user guides and an improved platform for managing e-invoices. These efforts position e-invoicing as a key tool in Malaysia’s digital transformation, ensuring smoother tax processes and strengthening economic transparency.

Conclusion

As Malaysia approaches full e-invoicing implementation by mid-2025, the incentives provided in the 2025 Budget are instrumental in easing the transition for businesses. By rewarding compliance and offering grants, tax deductions, and allowances, the government is helping companies embrace e-invoicing with minimal cost and effort. These measures not only support businesses but also pave the way for a more transparent and efficient tax ecosystem, benefiting Malaysia's economy as a whole.



For more information about the incentives for e-invoicing requirements, businesses can visit or contact them at the official LHDN website (https://www.hasil.gov.my/en/e-invoice).

Sources:

https://www.nst.com.my/business/economy/2024/11/1128938/budget-incentives-boost-e-invoicing-adoption-malaysia

https://www.bernama.com/en/news.php?id=2355224

https://www.hasil.gov.my/media/0xqitc2t/lhdnm-e-invoice-general-faqs.pdf

For more information about Goldsoft e-invoice Ready ERP/ e-invoice middleware, please do not hesitate to contact Goldsoft's sales team at 03-2732 8833 or fill up the form below for enquiry.