Regulatory updates - Malaysia

On July 7, 2026, the Inland Revenue Board of Malaysia (IRBM) published the e-Invoice Guideline Version 4.7. and the e-Invoice Specific Guideline Version 4.8. The updates introduce the e‑Invoice Special Voluntary Disclosure Programme (SVDP), a compliance initiative designed to help taxpayers regularise e‑Invoice obligations and correct historical omissions or inaccuracies.

e‑Invoice Special Voluntary Disclosure Programme (SVDP)

The SVDP is effective from July 7, 2026, to December 31, 2027, and applies to taxpayers that:

• Failed to submit e‑invoices from their mandatory implementation date.
• Submitted e‑invoices containing errors or information that does not comply with e‑invoice requirements.
• Omitted e‑invoices for certain transactions or periods.
• Are currently undergoing, or have been notified of, an IRBM e‑invoice compliance review.

IRBM has stated that voluntary disclosures made under the programme will be accepted provided taxpayers act in good faith and comply with the prescribed requirements. Taxpayers remain responsible for ensuring that all disclosures are complete and accurate.

As a rule, IRBM will not undertake e‑invoice compliance reviews, enforcement actions, penalties, or prosecution in relation to e‑invoices disclosed under the SVDP. However, this relief does not apply where submitted documents fail to comply with applicable requirements or where the disclosure involves fraud, wilful default, or negligence.

New SVDP document versions

To support the programme, IRBM has introduced two dedicated document versions within the MyInvois SDK: SVDP 1.2 (without digital signature) and SVDP 1.3 (with digital signature)

These document versions may only be used for submissions made under the SVDP and cannot be used for normal e‑invoice reporting outside the programme.

Additional SVDP requirements

Where a voluntary disclosure involves previously unreported consolidated e‑invoices, the documents must be submitted according to the relevant month of the transaction rather than as a single consolidated submission covering multiple months.

Guideline clarifications

In the updated e‑invoice Guideline, Business Registration Number (BRN) has been added to the list of abbreviations. The guideline clarifies that a BRN is the official registration number issued by the relevant government authority or registration body under which a taxpayer is registered, established, or incorporated.

On April 20, 2026, IRBM published e-Invoice Specific Guideline version 4.7, replacing version 4.6. The principal change extends the interim relaxation period for Phase 4 businesses (annual turnover between RM 1 million and RM 5 million) by 12 months to December 31, 2027.  

A key point to consider is that Version 4.7 reaffirms that the extension of the relaxation period does not alter the legal start date for e-invoicing extension; solely delays the start of penalty enforcement for certain compliance obligations. 

In other words, the mandatory start date of January 1, 2026 remains unchanged; full enforcement begins January 1, 2028. This follows the Cabinet's December 2025 decision raising the exemption threshold from RM 500,000 to RM 1 million and cancelling Phase 5. 

On April 22, 2026 and May 5, 2026 IRBM published updated General FAQs, reiterating the one-year extension of the interim relaxation period, and adding onboarding timeline examples for businesses that recently crossed the RM 1 million threshold.  

Please note that these are clarifications, not new policy. The FAQ in Malaysia serves as a supporting instrument designed to facilitate understanding of the guidelines, by offering practical use cases and examples to help interpret and apply the requirements more effectively. 

On 31 March 2026, the Director General of Customs (DGC) issued Public Ruling No. 01/2026 Determination of Foreign Currency Selling Exchange Rates for Service Tax Invoices and Sales Tax Invoices. The ruling is issued pursuant to Section 41 of the Service Tax Act 2018 and Section 42 of the Sales Tax Act 2018 and provides clarification on how foreign currency amounts must be converted into Malaysian Ringgit (MYR) for invoicing purposes.

The ruling applies to service tax‑registered persons and sales tax‑registered manufacturers when invoices are issued in a currency other than MYR.

Invoicing requirements under service tax and sales tax

Under Section 21 of the Service Tax Act 2018, registered persons are required to issue an invoice for taxable services provided. Where any amount on the invoice is stated in a foreign currency, it must also be stated in MYR using the applicable foreign currency selling exchange rate in Malaysia at the time the taxable service is provided.

Similarly, under Section 21 of the Sales Tax Act 2018 and Regulation 7 of the Sales Tax Regulations 2018, registered manufacturers issuing invoices for taxable goods must also convert any foreign currency amount into MYR using the applicable selling exchange rate in Malaysia at the time the goods are sold.

Determination of the applicable exchange rate

Where invoices are issued in foreign currency, the total amount of services or sales must be converted into MYR using the foreign currency selling exchange rate applicable in Malaysia at the time the taxable service is provided or the taxable goods are sold.

The ruling allows the exchange rate to be sourced from one of the following bodies:

• Bank Negara Malaysia (BNM)
• Any commercial bank in Malaysia or any bank registered under BNM
• International news agencies, including Bloomberg, Reuters, or Oanda
• Foreign central banks, such as the European Central Bank or the Federal Reserve Bank of New York

The same exchange rate source must be applied consistently in business reporting and accounting for at least one year from the end of the accounting period.

Alternative exchange rate sources

Any request to use a foreign currency selling exchange rate outside the permitted sources must be submitted in writing to the Service Tax Policy Branch or Sales Tax Policy Branch of the Royal Malaysian Customs Department for approval by the Director General of Customs.

Import‑related clarification

The ruling distinguishes between domestic transactions and imports:

• For imported taxable goods, customs duty, excise duty, and sales tax calculations must use the exchange rate determined by the Director General of Customs at the time of importation.
• For imported taxable services, the foreign currency selling exchange rate applicable in Malaysia at the time the service takes place must be used.