By DayakDaily Team
KUCHING, Jan 6: The Inland Revenue Board of Malaysia (IRBM) will not impose penalties for non-compliance with e-invoicing requirements during a 12-month transition period beginning Jan 1, 2026, as the federal government moves to ease the compliance burden on businesses, particularly micro, small and medium enterprises (MSMEs).
In a statement, IRBM said taxpayers involved in Phase 4 of the e-invoicing rollout will be given until Dec 31, 2026, to fully comply, extending the previously announced six-month grace period.
During the transition, enforcement action will be suspended provided taxpayers comply with the relaxed implementation rules.
Among the flexibilities allowed during the transition period is the issuance of consolidated e-Invoices for all activities and transactions, including for industries or activities listed under Section 3.7 of the e-Invoicing Specific Guidelines. Consolidated e-Invoices may be issued even if a buyer requests an e-Invoice.
Taxpayers are also permitted to issue consolidated self-billed e-Invoices for all self-billing situations as outlined under Section 8.3 of the guidelines. In addition, businesses will be allowed to include any transaction description in the “Product or Service Description” field.
Separately, the government has agreed to allow taxpayers from the construction materials wholesale and retail sector to issue consolidated e-Invoices effective Jan 1, 2026. Under this concession, e-Invoices will only be required for transactions exceeding RM10,000, or when requested by the buyer.
The government said the decisions are intended to give MSMEs sufficient time to prepare for e-invoicing, while ensuring construction materials traders are not burdened with the need to issue e-Invoices for every transaction.
The latest measures come as the federal government has agreed to postpone by another year the mandatory implementation of e-invoicing for companies with total annual sales of between RM1 million and RM5 million, which was previously set to come into force on Jan 1.
Prime Minister Datuk Seri Anwar Ibrahim said the decision was made after considering industry feedback that many businesses were still unprepared for the system.
“Some companies are still not ready because the cost of preparation (for e-invoicing) is quite high,” he said in his New Year’s message at the Prime Minister’s Department’s monthly assembly on Monday (Jan 5).
The Inland Revenue Board had earlier announced last June that the Ministry of Finance decided to defer e-invoicing for companies earning between RM1 million and RM5 million annually from July 1, 2025, to Jan 1, 2026, before the latest extension was approved.
Last month, Anwar also announced that businesses with annual revenue below RM1 million will be exempted entirely from e-invoicing requirements.
In a separate measure to ease cost pressures on smaller firms, the Prime Minister said the government will raise the threshold for small and medium-sized enterprises to be subject to service tax on rental services from RM1 million to RM1.5 million in total annual sales.
The government said the combined measures are aimed at ensuring businesses are not overburdened by compliance costs while maintaining the long-term goal of improving tax administration efficiency through digitalisation. — DayakDaily
