Why Employers in Malaysia Must Prepare for IRBM’s Mandated E-Invoicing

What is E-Invoicing?

E-invoicing is the electronic generation, exchange, and storage of invoices in a structured digital format. It allows for system-to-system communication between the supplier’s and the buyer’s accounting or ERP systems, eliminating the need for paper-based or manually created PDF invoices.

This is not the same as simply sending an invoice via email. An IRBM-compliant e-invoice must follow specific technical and formatting standards, and must be submitted to IRBM’s central platform for validation before being issued to the buyer.

Why is the Malaysian Government Mandating E-Invoicing?

Malaysia’s government has made clear that e-invoicing is part of a broader plan to modernize tax administration, increase transparency, reduce fraud, and improve overall efficiency.

Key goals include:

• Improving tax reporting accuracy

• Reducing shadow economy activities

• Minimizing opportunities for fraud and false claims

• Ensuring real-time tracking of business transactions

• Encouraging digital adoption among SMEs and large corporations

This initiative aligns with global trends—countries like Italy, Chile, Mexico, and India have already adopted similar models with success. Malaysia’s own model is inspired by the Continuous Transaction Control (CTC) framework.

IRBM’s E-Invoicing Rollout Timeline (2024–2025)

Here’s a breakdown of the implementation timeline:

• 1 August 2024: Companies with annual turnover exceeding RM100 million

• 1 January 2025: Companies with turnover exceeding RM25 million

• 1 July 2025: All businesses, regardless of turnover

This phased approach provides businesses time to adopt new systems, train staff, and ensure compliance—but make no mistake, the transition will require significant preparation.

Who Needs to Comply?

Every business entity registered in Malaysia—including sole proprietors, partnerships, SMEs, MNCs, and public-listed companies—will eventually need to comply with e-invoicing requirements.

Types of income covered:

• Business income

• Rental income

• Professional services

• Sales of goods

• Commission-based income

Some types of transactions and income are exempted, but businesses must understand the specific conditions outlined by IRBM to avoid confusion.

Challenges Employers May Face

Transitioning to e-invoicing is not without its hurdles. Common challenges include:

1. System Integration Issues

Companies using outdated or manual invoicing systems may need to overhaul or upgrade their software to integrate with IRBM’s e-invoicing portal via API.

2. Lack of Awareness and Training

Many employees are still unfamiliar with the technical requirements of e-invoicing. Without proper training, errors and delays are likely.

3. Data Accuracy and Compliance

E-invoices must include mandatory fields (buyer/seller info, invoice value, item description, tax code, etc.). Missing or inaccurate data will cause the invoice to be rejected.

4. Readiness of Smaller Businesses

SMEs may lack the financial and technical resources to implement changes quickly without external support.

Key Benefits of Adopting E-Invoicing Early

While the transition may feel like a burden initially, the long-term benefits of e-invoicing are substantial:

✅ Regulatory Compliance

Stay ahead of the curve by aligning with government regulations early. Avoid costly penalties and audits.

✅ Operational Efficiency

E-invoicing reduces manual processes, streamlines cash flow, and accelerates payment cycles.

✅ Cost Savings

Lower paper usage, printing costs, and human resource time.

✅ Fewer Errors

Automated data validation reduces the chances of duplicate or inaccurate invoices.

✅ Faster Reconciliation

Integration with accounting systems allows for real-time tracking of invoice status and faster financial closing.

Real-World Use Case: A Tale of Two Businesses

Company A began preparation in early 2024. They integrated their accounting software with IRBM’s system, trained their staff, and even tested several e-invoice formats. By August 2024, they were ready.

Company B waited until June 2025. They scrambled to understand submission methods, faced integration delays, and had to pause operations to sort out invoice rejections. They also incurred penalties for non-compliance.

➡️ Moral of the story: Early action = long-term success.

What You’ll Learn in OTC’s E-Invoicing Training

Our e-invoicing training program is designed to simplify the complex, reduce confusion, and empower you with hands-on knowledge.

Key modules include:

1. Understanding e-invoice formats & fields

   • Learn mandatory fields, tax codes, buyer/seller info, and formatting rules.

2. IRBM’s CTC Validation Flow

   • How to submit e-invoices for validation before issuing to buyers.

3. Invoice storage and submission requirements

   • What data needs to be stored and how IRBM maintains the audit trail.

4. Manual submission vs. API Integration

   • Pros and cons of each method and how to choose based on your resources.

5. Understanding income types and exemption rules

   • Know which transactions qualify and which do not.

6. Best practices for implementation

   • Strategic planning for smooth onboarding.

Flexible Learning – Online or Face-to-Face

We understand that every business has different needs. That’s why OTC Training Centre offers:

• 📍 Online via Zoom – ideal for remote teams

• 🏢 Face-to-Face Sessions – perfect for hands-on learning

• 🧑‍🏫 In-House Training  – customizable and HRD Corp claimable

• 🏨 Public Training – HRD Corp claimable

Why Choose OTC Training Centre Sdn Bhd?

With over a decade of experience in corporate training, OTC Training Centre Sdn Bhd is a trusted learning partner for hundreds of Malaysian employers.

We offer:

• ✅ HRD Corp-Claimable Courses

• ✅ Practical, instructor-led training

• ✅ Custom programs tailored to your business sector

• ✅ Experienced trainers with knowledge in accounting & tax compliance

FAQs About E-Invoicing in Malaysia

Q: Is e-invoicing mandatory for all companies?

A: Yes, by July 2025, all companies must comply regardless of size or turnover.

Q: Can I still issue paper invoices?

A: No, once e-invoicing applies to your business, all invoice issuance must follow the IRBM e-invoice system.

Q: What if my accounting software is not ready?

A: You can start with manual submissions via the IRBM portal. However, integration is recommended for long-term efficiency.

Q: Are training costs claimable?

A: Yes, OTC’s e-invoicing training is 100% HRD Corp claimable.

Don’t Wait for the Deadline

The shift to e-invoicing is more than just a compliance exercise—it’s a step forward in modernizing your business processes. Early adopters will enjoy greater efficiency, reduced costs, and peace of mind.

Whether you’re an SME or a multinational corporation, OTC is here to guide you every step of the way.