On 5 January 2026, Lembaga Hasil Dalam Negeri Malaysia (HASiL) announced important updates to the implementation of E-Invoice Phase 4, providing much-needed flexibility and additional preparation time for businesses—especially Micro, Small and Medium Enterprises (MSMEs). See LHDN's guideline here.
These updates aim to ensure a smoother and more practical adoption of e-invoicing across Malaysia.
12-Month Transition Period for E-Invoice Phase 4
Originally set at 6 months, the transition period for E-Invoice Phase 4, which commenced on 1 January 2026, has now been extended to 12 months, ending on 31 December 2026.
This extension allows businesses more time to:
Adjust internal accounting and invoicing processes
Configure systems to meet e-invoicing requirements
Ensure compliance without disrupting daily operations
Consolidated E-Invoice Allowed During Transition
Throughout the transition period, HASiL allows businesses to adopt a more flexible approach to e-invoicing:
Consolidated e-invoices may be issued for all activities and transactions
Consolidated self-billed e-invoices are permitted where applicable
Businesses may use flexible transaction descriptions in the “Product or Service Description” field
Consolidated e-invoices are allowed even when buyers request an e-invoice
Importantly, no penalties will be imposed for non-compliance during the transition period, provided these conditions are met.
Special Relief for Construction Materials Businesses
Additional relief has been granted to businesses involved in the wholesale and retail of construction materials.
Effective 1 January 2026:
Businesses may issue consolidated e-invoices
E-Invoice is only required when:
A transaction exceeds RM10,000, or
A buyer specifically requests an e-invoice
This measure helps reduce administrative burden, particularly for businesses handling high volumes of small-value transactions.
What Businesses Should Do Next
While penalties are waived during the transition period, businesses are strongly encouraged to:
Begin planning and system preparation early
Review current invoicing workflows
Seek professional guidance to ensure full compliance by 2027
Early preparation will help avoid last-minute challenges once the transition period ends.
How we can help?
At AdrianYeo Tax KL, we provide end-to-end support for:
E-Invoice implementation and compliance
Accounting and tax advisory
Payroll subscription services
Our team is ready to help you navigate the E-Invoice requirements with clarity and confidence.