Relaxation period does not mean do nothing
This is the misreading that we see most often. It is an understandable one. LHDN gave each phase of businesses an interim relaxation period. Many business owners read that phrase as permission to wait.
What the relaxation period is
The relaxation period is not a delay of the obligation. The obligation applies from your mandatory date. During the relaxation period, LHDN allows three things:
- You can issue a consolidated e-Invoice for all transactions, including the activities that normally need an individual e-Invoice.
- You can issue a consolidated self-billed e-Invoice for all self-billed cases.
- You can decline a buyer who asks for an individual e-Invoice, if you issue the consolidated one.
LHDN also states that it will not prosecute non-compliance during the relaxation period. That protection has one condition. You must issue the consolidated e-Invoices.
What it is not
A business that issues nothing is not inside the relaxation period. It is outside the mandate. If questions come later, “we did nothing and waited” and “we were registered and issued consolidated e-Invoices” are two different positions. Know which position your business is in. Do not guess.
When it ends
For businesses with a mandatory date in 2026, the relaxation period ends on 31 December 2027. For the three earlier phases, it has already ended. From that date, each transaction must follow the full rules. Read the compliance timeline for the dates of each phase.
The safe reading
The safe reading is the simple one. Relaxed does not mean optional. It means you have room to set the system up correctly. It does not mean you can leave the system until later.
Are you not sure if your current setup counts? Talk to us. The Finance & Compliance Starter Kit gets a business inside the relaxation period, correctly, in four weeks.
Sources: LHDN e-Invoice Specific Guideline v4.7, Section 16 (Table 16.1); e-Invoice FAQ, Part 4.
This is Part 4 of 8 in the e-Invoice series. Start with Part 1: The e-Invoice threshold changed. Ten rules that many Malaysian businesses still miss. Previous: Part 3: You can cancel an e-Invoice. You have 72 hours to do it. Next: Part 5: MyInvois rejected your e-Invoice? Check this one thing first.
This article is general information, not tax advice.