Relaxation Period

The relaxation period is an officially designated grace period that LHDN provides to businesses in each phase of the e-invoicing rollout, immediately following the phase's go-live deadline. During the relaxation period, LHDN does not impose penalties on businesses that fail to submit invoices through MyInvois or that submit invoices with errors — recognising that transitioning to a new mandatory system takes time and that businesses need a buffer to complete their implementation, staff training, and system testing.

Phase 4 of the e-invoicing rollout, covering all remaining taxpayers not included in Phases 1–3, came with a full 12-month relaxation period running from 1 January 2025 to 31 December 2025. This was the most generous relaxation period of any phase, reflecting the very large number and diversity of businesses affected (including micro-SMEs, sole proprietors, and businesses in less digitalised industries). During this period, Phase 4 businesses can issue invoices in any format — including paper and PDF — while working toward full MyInvois compliance.

What businesses can do during the relaxation period: they may continue issuing invoices in their current format (paper, PDF, or existing electronic format), begin registering on MyInvois and testing submissions, set up or purchase e-invoicing software, train accounting and finance staff on the new system, start collecting TINs from customers and suppliers, and gradually migrate to full MyInvois compliance at their own pace within the relaxation window. There is no penalty for not yet being fully compliant during this period.

What businesses cannot do during the relaxation period: the relaxation period does not exempt businesses from the underlying legal obligation to eventually comply. Businesses cannot use the relaxation period as a reason to defer preparation indefinitely — the period has a firm end date. Additionally, some aspects of compliance remain important even during relaxation: businesses should still ensure their accounting records are accurate and reconcilable, and invoices issued during the relaxation period should still be accurately reflected in income tax and SST returns.

Transition activities that businesses should prioritise during the relaxation period include: conducting a gap analysis of current invoicing processes, evaluating and selecting e-invoicing software or an ERP module, registering on the MyInvois portal and applying for API credentials if needed, updating customer and supplier master data to include TINs, piloting e-invoice submission for a subset of transactions, and working toward full compliance well before the relaxation period end date to avoid a last-minute rush.