E-invoice Advisory to NECF members

To all NECF Malaysia Members

Subject: Implementation of E-Invoicing by Lembaga Hasil Dalam Negeri Malaysia (LHDNM) for Religious Institutions

Dear NECF Members,

In the last 6 months, there have been a series of major updates on the topic of implementation of e-Invoicing by Lembaga Hasil Dalam Negeri Malaysia (LHDNM).

This advisory serves to provide a summary of the impact of these major updates with regards to religious institutions in Malaysia, namely:

1. Revised thresholds for mandatory e-Invoicing
2. Receipt of donations or contributions by religious institutions
3. Extension of Interim Relaxation Period for taxpayers with an annual turnover or revenue of RM1 million and up to RM5 million

1. Revised thresholds for mandatory e-Invoicing

Under the e-Invoice Guidelines (Version 4.6 dated 7 December 2025) on e-Invoicing issued by LHDNM, the timelines for implementing e-Invoicing for all persons (including religious institutions) are as follows (see pages 12 and 15 of the said guidelines as attached):

2025-12-07 irbm-e-invoice-guideline page 12 and 15

* Annual turnover or revenue includes all donations or contributions received, and all forms of revenue received from the sale of goods or provision of services, including and not limited to interest income and rental income.

* Determination of the annual turnover or revenue for the implementation of e-Invoice is explained in Appendix A.

In this regard, all religious institutions with an annual turnover or revenue of less than RM1 million no longer have to register for e-Invoicing and issue e-Invoices at all. Notwithstanding the exemption, your church is still welcomed to implement e-Invoicing, and support the Government’s digital initiative.

However, for all NECF member churches with an annual turnover or revenue of RM1 million or more, your church ought to have applied for the Tax Identification Number (TIN) if you do not have one and your church would have had to implement e-Invoicing by 1 January 2026.

2. Receipt of donations or contributions by religious institutions

2025-07-07 specific-faq-donations-or-contributions

On 7 July 2025, LHDNM released a Frequently Asked Questions (FAQ) relating to the receipt of donations or contributions by religious institutions, a copy of which is attached for your easy reference.  This FAQ will apply to all churches with an annual turnover or revenue of RM1 million or more only.

Under this FAQ, the following persons are no longer required to issue e-Invoices for donations or contributions received:

1. Religious institutions or organisations established exclusively for the purpose of religious worship or the advancement of religion
2. Any person (excluding (a) above) receiving donations or contributions that are not tax-exempt under the Income Tax Act (ITA) 1967.

However, if your church is a tax-exempt institution, organisation or fund (IOF) approved under subsections 44(6), 44(6B), 44(11B), 44(11C), 44(11D) and 34(6)(h) of the ITA, this exception does not apply to you.

Just to be clear, for all churches with an annual turnover or revenue of RM1 million or more, even if your church is no longer required to issue e-Invoices for donations or contributions received, your church is still required to fulfil all the other responsibilities of e-Invoicing, such as issuing self-billed e-Invoices if the circumstances as outlined in Section 8.3 (Version 4.6 dated 5 January 2026) of the e-Invoice Specific Guideline are applicable to your church. 

2026-01-05 irbm-e-invoice-specific-guideline (Version 4.6) - Section 8

For more information on self-billed e-Invoices, please refer to the attached Section 8 of the e-Invoice Specific Guideline (Version 4.6 dated 5 January 2026).

In addition, if your church undertakes other activities such as the sale of goods or provision of services and receives payment for these activities, e-Invoices are required to be issued for any goods sold or services rendered by the religious institution or organisation.

3. Extension of Interim Relaxation Period for taxpayers with an annual turnover or revenue of RM1 million and up to RM5 million

On 5 January 2026, the IRBM issued a media release on the extension of interim relaxation period to assist taxpayers with an annual turnover or revenue of RM1 million and up to RM5 million with their implementation of e-Invoicing.

2026-01-05 irbm-e-invoice-specific-guideline p121-122

A copy of the IRBM Media Release and Pages 121-122 of the e-Invoice Specific Guideline (Version 4.6 dated 5 January 2026) is attached for your easy reference.

In summary, all taxpayers with an annual turnover or revenue of RM1 million and up to RM5 million:

• MUST start e-Invoicing reporting with effect from 1 January 2026. 
• MUST prepare consolidated e-Invoices and consolidated self-billed e-Invoices where applicable.

Under Section 16.2 of the E-Invoice Specific Guideline (Version 4.6 dated 5 January 2026), during the interim relaxation period, Government of Malaysia has agreed to allow taxpayers in this category to adopt the following:

(a) issue consolidated e-Invoice for all activities and transactions, including the industries or activities listed under Section 3.7 of this e-Invoice Specific Guideline.

(b) issue consolidated self-billed e-Invoice for all self-billed circumstances outlined under Section 8.3 of this e-Invoice Specific Guideline.

(c) input any information / details in the “Description of Product or Service” field in the consolidated e-Invoice or consolidated self-billed e-Invoice. In other words, taxpayers are not restricted to input the receipt / statement / bill reference numbers as required under Section 3 and 4 of this e-Invoice Specific Guideline.

(d) not to issue individual e-Invoice or individual self-billed e-Invoice, even if the buyer (in the case of e-Invoice) / supplier (in the case of self-billed e-Invoice) has made a request for an individual e-Invoice or individual self-billed e-Invoice to be issued, provided that the taxpayers comply with item (a) or (b) above, as the case may be.

Additionally, Section 16.3 of the e-Invoice Specific Guideline (Version 4.6 dated 5 January 2026), the IRBM will not undertake any prosecution action under Section 120 of the Income Tax Act 1967 during the interim relaxation period on non-compliance of the e-Invoice requirements, provided that taxpayers comply with the requirements mentioned under Section 16.2 (a) and (b) of this e-Invoice Specific Guideline.

4. Other Matters

Finally, please note that all persons, including all churches, are required to provide their information to suppliers to ensure that suppliers can fulfil their e-Invoice compliance obligations (for example, where your suppliers are engaged in activities or transactions where consolidated e-Invoice is not allowed (e.g., purchase of motor vehicle, hiring of construction contractors, purchase of construction materials)).

If you have any further queries regarding e-invoicing, you can also seek further advice from the LHDNM at your respective state office or your tax consultant or your external auditor.

In His service,

Elder Lee Choong San

Honorary Treasurer
NECF Malaysia

Determination of the annual turnover or revenue for the implementation of e-Invoice [Page 13-14 e-Invoice Guidelines (Version 4.6 dated 7 December 2025)]

The annual turnover or revenue for the implementation of e-Invoice will be determined based on the following:

1. Taxpayers with audited financial statements: Based on annual turnover or revenue stated in the statement of comprehensive income in the audited financial statements for financial year 2022.

2. Taxpayers without audited financial statements: Based on annual revenue reported in the tax return for year of assessment 2022.

3. In the event of a change of accounting year end for financial year 2022, the taxpayer’s turnover or revenue will be pro-rated to a 12-month period for purposes of determining the e-Invoice implementation date.

Kindly note that for the purposes of the above determination, the annual turnover or revenue will be based on 2022’s audited financial statements or tax return, as the case may be.

Once the taxpayer’s e-Invoice implementation timeline has been determined, any changes to the taxpayer’s annual turnover or revenue in subsequent years will not change the taxpayer’s obligations to implement e-Invoice based on the above-mentioned implementation timeline.

For new businesses or operations commencing from the year 2023 to 2025 with an annual turnover or revenue of at least RM1,000,000, the e-Invoice implementation date is 1 July 2026.

For new businesses or operations commencing from year 2026 onwards, the e-Invoice implementation date is 1 July 2026 or upon the operation commencement date. However, if the first year’s turnover or revenue is less than RM1,000,000, the e-Invoice implementation date would be 1 January in the second year following the year in which the total annual turnover or revenue reached RM1,000,000.