In this course · 6 of 6
Course 5
E-invoicing for sellers
6 lessons · 6 min
- 1Does My Online Store Need to Issue MyInvois E-Invoices in Malaysia?
- 2E-Invoice Start Dates by Turnover in Malaysia: LHDN Timeline
- 3Who Issues the E-Invoice for Shopee, Lazada or TikTok Shop Orders?
- 4How a Consolidated E-Invoice Works for B2C Online Sales in Malaysia
- 5Why Must an Online Business Under RM3 Million Still Issue E-Invoices?
- 6E-Invoice Penalty and Relaxation Period for Online Sellers in Malaysia
The short answer
Failing to issue a required e-invoice is an offence under section 120(1)(d) of the Income Tax Act 1967. Businesses with turnover below RM3 million are exempt and face no penalties. For taxpayers with turnover up to RM5 million, the interim relaxation period runs until 31 December 2027 and allows monthly consolidated e-invoices.
The Inland Revenue Board (LHDN) FAQ states that failure to issue an e-invoice is an offence under section 120(1)(d) of the Income Tax Act 1967. The enforcement date for each group is tied to its implementation date.
Interim relaxation. The FAQ lists an interim relaxation period for each phase, and for taxpayers with turnover up to RM5 million it runs until 31 December 2027. This applies to the 1 January 2026 and 1 July 2026 implementation dates.
What relaxation means. Taxpayers who are not yet ready to issue individual e-invoices may issue consolidated e-invoices (and consolidated self-billed e-invoices) on a monthly basis. A taxpayer whose system is ready may issue individual e-invoices from the start.
Exempt taxpayers. The FAQ says that where a taxpayer is exempt, because turnover is below RM3 million and the exemption criteria are met, no compliance action or penalties will be imposed. This also covers a taxpayer who started issuing e-invoices before the threshold was raised, and who is not required to apply for anything to stop.
Penalty amounts follow the Act and may differ by case. This summary reflects the LHDN FAQ updated 4 September 2026. (Penalty amount: needs research.)
Legal basis and sources
The law
- Income Tax Act 1967, s.120(1)(d)
- Income Tax (Issuance of Electronic Invoice) Rules 2024 [P.U.(A) 265]
General information for business owners, not legal, tax or professional advice. Rules change, so check the sources or ask a licensed professional before you act.
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