13th October 2025 - 4 min read
Malaysia’s new e-invoicing system has been rolling out since August 2024, and if you’re a freelancer or self-employed professional, you’re probably wondering what it means for you. Here’s what you need to know.
The short answer: it depends on how much you earn.
If your annual revenue is below RM500,000, you’re exempt. You can continue using regular invoices just as you always have. Most freelancers fall into this category and won’t need to worry about e-invoicing for now.
If your annual revenue exceeds RM500,000, you’ll need to follow the phased implementation timeline. Businesses earning RM5 million and above started in July 2025, those between RM1-5 million begin in January 2026, and businesses earning RM500,000 to RM1 million start in July 2026.
One important catch: once you’re required to implement e-invoicing, you must continue using it even if your revenue drops below RM500,000 later. The requirement doesn’t go away.
E-invoicing creates an automatic digital trail of all your income. Every invoice you issue gets validated by LHDN through their MyInvois platform in real-time, creating a permanent record.
When tax season arrives, you won’t need to dig through folders and receipts to figure out your earnings. LHDN already has validated records of every invoice you issued. Your income documentation becomes automatic and standardised.
You’ll still need to submit each invoice through the MyInvois Portal or integrate your accounting software with LHDN’s system. For freelancers with straightforward billing, the free MyInvois Portal should work fine. You can create invoices individually or upload a spreadsheet for bulk generation.
Getting started is straightforward. Register on the MyTax Portal (you should already have an account if you file taxes), apply for the appropriate user role to access MyInvois, and once approved, you can access it directly through your MyTax account.
Creating an invoice involves filling in your details as the supplier, entering your client’s information, including their Tax Identification Number (TIN), adding your services or products as line items, and submitting for validation. LHDN validates the invoice in real-time, usually within seconds. Both you and your client receive email notifications once validated.
You have a 72-hour grace period after validation. If you or your client spot an error, either party can request rejection or cancellation within this window. After 72 hours, you’ll need to issue a credit note or debit note to make corrections.
First, check whether your vendor is actually required to issue e-invoices. Businesses below RM500,000 in revenue are exempt, so their regular invoices are perfectly fine.
If your vendor should be using e-invoicing but isn’t, you can request a proper e-invoice from them. During the transitional period, LHDN accepts both regular invoices and validated e-invoices for tax purposes.
If you receive an e-invoice with errors, use the 72-hour window to request rejection through the MyInvois Portal. The vendor will be notified and can correct the issue.
Yes, and that’s by design. E-invoicing creates real-time records that LHDN can see immediately. Every validated e-invoice is visible to the tax authority right away.
For freelancers operating legitimately, this shouldn’t be concerning. It actually creates clear, indisputable proof of your business income. The transparency works in your favour when you’re audited or need to prove earnings for loans or financing.
The system makes it harder to underreport income, which creates a level playing field. When everyone follows the same rules, honest taxpayers benefit.
Failing to issue an e-invoice when required can result in fines from RM200 to RM20,000, or imprisonment up to six months, or both, for each instance of non-compliance.
However, LHDN focuses on education during initial implementation. Each phase includes a six-month “relaxation period” before penalties apply, giving businesses time to adapt.
Stay compliant by:
E-invoicing is part of Malaysia’s digital transformation. Even if you’re below the threshold today, understanding the system now prepares you for future growth.
The long-term benefits are genuine. Next year’s tax filing becomes simpler when your income is automatically documented. You’ll spend less time recording your earnings and more time focusing on your business.
Start preparing now by reviewing your invoicing process, ensuring you collect necessary client information, including TINs, and organising records digitally. Stay informed through LHDN’s official updates and freelancer communities.
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Comments (1)
I didn’t know freelancers can also use this system! Useful info