What is E-Invoicing?

  • E-invoicing involves of invoices that are electronically delivered in a structured data format between one service provider to (suppliers) and clients (buyers) and suppliers.
  • This digital method of invoicing enables electronic and automatic processing of invoices.
  • For e-invoicing to be legally recognized for tax and contractual purposes and for compliance purpose regulations need to be modified to acknowledge them as valid documents.

The true definition of an electronic invoice is that it should contain data from the supplier in a format that can be entered (integrated) into the buyer’s Account Payable (AP) system without requiring any data input from the buyer’s AP administrator.

Why E-Invoicing?

  • It improves the process of a buyer and seller to save time and money and process payment faster
  • Moving towards paperless and eco-friendly reduce cost
  • Digitalization business process faster and linked to an accounting system the accounting transaction will be updated automatically.
  • Reduce fraud activities – example like issuing fake invoices or manipulating the amounts on invoice.
  • Increase accuracy – Manual invoicing may create data entry error or mistake , with E-Invoicing it reduces the possibility of errors and data entry mistake.
  • Real-time monitoring and accessing to Financial information that help in decision making in business
  • Submission of financial reports, audit ,tax can be submitted faster and on time .

During the Budget 2023 Malaysia planned to introduce and implement the E-INVOICING by LHDN (Inland Revenue Board of Malaysia). LHDN CEO Datuk Mohd Nizom Sairi said “e-invoicing” will ensure a seamless business infrastructure and increase compliance and transparency in taxing and business productivity.

“It provides many benefits to taxpayers in terms of improving the efficiency of business operations, simplifying record keeping and reducing tax compliance costs.

When Malaysia will launch E-Invoicing?


  • 1st Stage June 2024 – LHDN is targeting 4,000 businesses for “e-invoicing” implementation, targeting ( mandatory for businesses with a yearly turnover of over RM100 million (B2B)
  • 2nd Stage 2025 will be mandatory for businesses with turnover of more than RM50 million (B2B)
  • 3rd Stage 2026 for businesses with over RM25 million turnover.(B2B)
  • 4th Stage 2027 is targeted to be mandatory for all businesses..(B2B)
  • Final Stage implementation for business-to-customer (B2C) will be the last phase once implementation for business-to-business (B2B) is firm.

Currently in Asia Pacific several countries that are using E-INVOICING system are as per below

CountryDateComments (click for details)
AustraliaJul 2023PEPPOL-based e-invoicing with no govt intervention B2B
ChinaJan 2023Special e-fapiao VAT invoice being piloted with 2023 full implementation
IndiaOct 2020B2B pre-clearance with separate B2C; completed Apr 2021
IndonesiaJul 2015e-Factur Pajak electronic invoicing
JapanOct 2023Tax qualified invoices
KazakhstanJan 2017e-invoicing IS ESF
KyrgyzstanJan 2023Mandatory e-invoicing for goods
Malaysia2024e-invoicing pre-clearance
Mauritius2023e-invoicing System with digital transaction reporting
New ZealandMar 2022B2G PEPPOL-based e-invoicing
PhilippinesJul 20222022 pilot of e-invoices; to follow South Korea model
SingaporeTBCMandatory B2G e-invoicing on InvoiceNow
South Korea2011Near real-time invoice reporting
Taiwan2017Electronic GUI invoices; non-residents since 2020
Thailand2018E-invoice reporting where adopted
VietnamNov 2021Pre-clearance B2B verification code e-invoice

The e-invoicing initiative was in line with rapid development in digital revolution with today’s business model that requires a simplified method of exchanging information and business transactions domestically and globally.

Are Malaysian business ready for this ? The answer is NO! NOT YET!. E-Invoicing will be a compulsory requirement in future for all businesses . SME’s looks like have many year but please get ready from now. Use online accounting system , payroll system , billing system . Start the journey of digitalization now.

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