Malaysia’s B2B E-Invoicing Mandate for 2025: Key Information
Malaysia’s B2B E-Invoicing Clearance Mandate: What You Need to Know for 2025
By Ioana Ploesteanu, Product Marketing Manager, Tradeshift
The 6-month grace period for B2B e-invoicing clearance in Malaysia ended in December 2024. The first phase of the e-invoicing compliance mandate is now fully in effect, requiring businesses to use a compliant e-invoicing provider connected to MyInvois, the government’s e-invoicing clearance system, or to connect directly to it.
Companies doing business in Malaysia, launching in the market this year, or working with Malaysian trade partners must ensure their e-invoicing, AP, and AR systems comply with the clearance requirements.
This article recaps the 2024 developments, explores what to expect in 2025, and highlights how Tradeshift can help businesses continue seamless document transactions amidst the B2B e-invoicing clearance mandate.
Recap of 2024: Malaysia’s E-Invoicing Compliance Journey
The introduction of the e-invoicing clearance mandate in Malaysia aimed to enhance tax transparency, reduce fraud, and improve efficiency in financial reporting.
In 2024, Malaysia’s Inland Revenue Board (LHDN) rolled out the first phase of its e-invoicing compliance framework, targeting large businesses with an annual turnover exceeding RM100 million.
The multi-phase mandate requires all B2B transactions to be processed through the government’s MyInvois platform, which facilitates real-time validation and clearance of e-invoices. Therefore, businesses must either integrate their systems with the MyInvois platform or work with a compliant e-invoicing provider, such as Tradeshift, which is directly connected to MyInvois, ensuring that all invoices are transmitted in the approved format and validated by the LHDN.
After a 6-month transition period introduced on August 1, 2024, Malaysia ended the year with the first phase of its e-invoicing clearance mandate in effect.
What to Expect for 2025: Expanding the E-Invoicing Mandate
As we move into 2025, the scope of the B2B e-invoicing mandate in Malaysia is expanding into phases 2 and 3.
The LHDN has announced that medium-sized businesses with an annual turnover between RM25 million and RM100 million will be required to comply with the mandate starting January 1, 2025, with full implementation by July 1, 2025.
On February 18, 2025, the Deputy Finance Minister of Malaysia, Lim Hui Ying, announced that as of February 13, 24,700 taxpayers had adopted the new clearance system with 173 million e-invoices issued, of which more than 11,600 were taxpayers under Phase 2, which started on January 1, 2025.
For the third phase, which concerns small and medium businesses that amount to 240,000 entities, the Malaysian government announced on February 20, 2025, that it is postponing the mandate to January 1, 2026, with a 6-month transition period. This way, SMEs will have more time to adapt and clear their invoices through the government system.
In conclusion, in 2025 – 2026, regardless of the size of your company, if you are doing business in Malaysia, you will need to be compliant, connect to MyInvois, and clear your e-invoices.
Tradeshift’s Ready-to-Use E-Invoicing Clearance Solution
At Tradeshift, we understand the complexities of transitioning to a compliant e-invoicing system or connecting to a government clearance system. That’s why we’ve developed a robust solution that is already in production with one of our clients in the manufacturing and retail industry. Our platform is fully aligned with Malaysia’s e-invoicing compliance requirements, ensuring that businesses can seamlessly integrate with the MyInvois platform and meet all regulatory obligations.
Tradeshift’s e-invoicing compliance solution offers:
- Real-Time Validation: Instant validation of invoices through the MyInvois platform, reducing errors and ensuring compliance.
- Seamless Integration: Easy integration with existing ERP and accounting systems, minimizing disruption to business operations.
- Scalability: A flexible solution that grows with your business, whether you’re a large enterprise or a medium-sized company.
- Beyond Compliance: For businesses looking to optimize their AP and AR processes further, the Tradeshift platform includes AP automation functionalities, AI-powered assistance, and data analytics and reporting capabilities.
By choosing Tradeshift, businesses can confidently clear B2B e-invoices in Malaysia, knowing they are using a solid and innovative e-invoicing platform.
Why Choose Tradeshift for E-Invoicing Compliance in Malaysia?
If the previous section wasn’t convincing enough, here are a few more reasons why Tradeshift stands out:
- Proven Expertise: Tradeshift has a proven track record of helping businesses achieve compliance in complex regulatory environments. Our solution is already in use by clients in Malaysia, demonstrating our commitment to delivering results.
- End-to-End Support: From system integration to ongoing compliance monitoring, Tradeshift provides comprehensive support to ensure a smooth transition to e-invoicing.
- Future-Proof Technology: Our platform is designed to adapt to evolving regulations, ensuring that your business remains compliant as the mandate expands.
- Global Reach: As a global leader in e-invoicing and supply chain solutions, Tradeshift brings unparalleled expertise and innovation.
Our compliance-as-a-service solution currently supports 70 countries, with a streamlined process for tax clearance mandates in 12 countries, as well as e-invoicing mandates. We are the only company offering cross-zone fapiao e-invoicing capabilities in China and among the first to become a registered PDP (PDP immatriculée) in France.
France, Romania, Malaysia, and Germany are just a few examples of the countries where we support tax clearance or B2B e-invoicing mandates, with other European and APAC countries on our roadmap.
We continually monitor emerging global regulations to ensure compliance excellence and prioritize adding additional countries to our roadmap.
Penalties for non-compliance are increasing. Is your business compliant?
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