LHDN e-invoicing for Malaysian hotels

e-Invoicing has been mandatory for taxpayers above RM5 million turnover since 1 July 2025 or earlier, and for the remaining taxpayers at RM1 million and above since 1 January 2026. Which band you are in is set by your 2022 audited accounts or tax return, and it does not change if your turnover changes afterwards.

Three groups have 1 July 2026 as their date instead: businesses that started trading between 2023 and 2025 with turnover of at least RM1 million; businesses that were below RM1 million in 2022 but reached or exceeded RM1 million in YA2023, YA2024 or YA2025; and businesses below RM1 million that fail the exemption criteria below.

Because 2022 was a depressed year for Malaysian hotels, many properties that were below RM1 million then have since crossed it and are in the 1 July 2026 group. The 1 January 2026 date has not moved since LHDN set it in June 2025; what LHDN extended in April 2026 was the penalty relaxation, not the obligation.

Below RM1 million the position is settled, not pending. Taxpayers with annual turnover or revenue of less than RM1,000,000 are exempt from issuing e-invoices, including self-billed e-invoices (e-Invoice Guideline v4.7, §1.6.1(e)).

The exemption does not apply if the business has a non-individual shareholder, a holding company, or a related company or joint venture, in each case with annual turnover of at least RM1 million (e-Invoice FAQs Q90) — so a small hotel owned by a group is in scope even if the hotel itself is well under the threshold.

A business below RM1 million that fails those criteria, or that was below RM1 million in 2022 but reached RM1 million in YA2023, YA2024 or YA2025, has been required to issue e-invoices since 1 July 2026. If you cross RM1 million later, you start on 1 January of the second year following the year of assessment in which you crossed it. LHDN says these exemptions will be reviewed from time to time; this page states the position as at 27 August 2026.

There is deliberately no 2028 row. Nothing begins in 2028; LHDN’s forbearance simply lapses, and the offence it was holding back has been live all along.

These dates are worth verifying before you act on them, against LHDN’s own guidelines index rather than a search result — a search can return a superseded file under a current version’s title.

For taxpayers up to RM5 million turnover, LHDN’s undertaking not to prosecute under section 120 of the Income Tax Act 1967 runs to 31 December 2027 — but only for taxpayers that meet its conditions. A taxpayer in that band that is not issuing both consolidated e-invoices and consolidated self-billed e-invoices has no cover now. Taxpayers above RM5 million are already exposed; their relaxation periods ended on 31 January 2025, 30 June 2025 and 31 December 2025.

Nothing new starts in 2028: failure to issue an e-invoice has been an offence throughout under section 120(1)(d), carrying a fine of not less than RM200 and not more than RM20,000, or imprisonment up to six months, or both, for each non-compliance. LHDN’s forbearance simply lapses.

LHDN has run an e-Invoice Special Voluntary Disclosure Programme since 7 July 2026, closing 31 December 2027. Non-compliance disclosed under it attracts no penalty or prosecution — but relief fails if the disclosed e-invoices themselves do not meet LHDN’s specifications, and it fails where the disclosure involves fraud, wilful default or negligence.

A single transaction at or above RM10,000 must have its own e-invoice and cannot be included in a consolidated e-invoice. The rule applies to all industries and took effect on 1 January 2026. A transaction of exactly RM10,000 is included.

LHDN has not confirmed whether the RM10,000 rule applies during the interim relaxation period. Section 16.2(a) of the Specific Guideline lets taxpayers in that period consolidate all activities and transactions, including the Section 3.7 list where the RM10,000 rule sits. Against that, Example 24 — added in July 2026 — applies the rule to a February 2026 transaction without mentioning the relaxation. Until LHDN clarifies, issue an individual e-invoice for any transaction at or above RM10,000, and confirm your position with your tax agent if you cross the threshold routinely.

Illustration only — LHDN has not defined ‘single transaction’ for accommodation, and has issued no hotel-specific guidance on it. If a RM14,000 folio is one transaction, nothing in a PMS objects when it closes into the consolidated pile, and the property finds out at audit. This is one of the checks KAI runs nightly against the folios in your own night audit, which is the point at which it is still cheap to fix.

Most hotel room revenue comes from guests who never ask for an invoice. Rather than issuing thousands of individual e-invoices, a property submits a consolidated e-invoice covering those transactions for the month.

It is due within seven calendar days after the month end — the T+7 deadline. Weekends and public holidays count. January’s consolidation is due by 7 February.

A guest who does not ask for an e-invoice can be given an ordinary receipt and included in the hotel’s monthly consolidated e-invoice. Two limits apply. The guest’s right to ask for an individual e-invoice runs only to the end of the month of the transaction; after that the hotel may decline (Specific Guideline, Example 5). And a transaction at or above RM10,000 should be invoiced individually whether or not the guest asks.

The relaxation is conditional on doing two things, not one: issuing consolidated e-invoices for all activities and transactions, and issuing consolidated self-billed e-invoices for all self-billed circumstances. Commission paid to a foreign OTA is a cross-border transaction requiring a self-billed e-invoice. A hotel that issues its guest consolidated e-invoices faithfully but skips self-billed e-invoices on OTA commission has forfeited the relaxation.

This is the half of the obligation a property is most likely to miss, because it is not visible in room revenue. The guest side looks complete, the monthly consolidation goes in on time, and the relief the property believes it has is already gone.

Accommodation is not one of the activities LHDN excludes from consolidated e-invoicing. The excluded list covers automotive, aviation, luxury goods and jewellery (on hold), construction, licensed betting and gaming pay-outs, payments to agents, dealers or distributors, electricity supply, telecommunications, and — across all industries — any single transaction at or above RM10,000.

A hotel is caught by two of these: the RM10,000 value test, and payments to agents, dealers or distributors, which reaches commission paid to travel agents and OTAs on the self-billed side.

LHDN has not issued e-invoicing guidance specific to hotel operators. Its Tourism industry FAQ addresses travel agents, airlines and tour packages, and was last updated on 14 June 2024 — before the RM10,000 rule took effect — so do not rely on it for that rule.

The one hotel-specific e-invoice requirement is the Supplier’s Tourism Tax Registration Number, a mandatory field for tourism tax registrants, which LHDN says may include hotel operators and online travel operators.

• Know which band the property is in — it is set by the 2022 audited accounts or tax return, not by this year's turnover.
• Issue consolidated e-invoices every month for all activities and transactions.
• Issue consolidated self-billed e-invoices for all self-billed circumstances, including commission paid to OTAs and travel agents. Both limbs are conditions of the relaxation; doing one is not doing it.
• Catch every transaction at or above RM10,000 before month end, and issue it individually.
• Issue an individual e-invoice when a guest asks — their right to ask runs to the end of the month of the transaction, and after that you may decline.
• Submit the consolidation within seven calendar days after month end, every month. Weekends and public holidays count.
• Keep the underlying records — the figures behind a submitted invoice have to still be there when someone asks about them.

KAI does not replace your PMS and does not file on your behalf. It reads the reports your PMS already prints, checks each night’s figures against the rules above, flags the folios that need an individual e-invoice, and seals the verified record into a tamper-evident vault.

The vault keeps that record for seven years, and the retention clocks it has to satisfy do not line up. Income tax records must be kept for seven years under section 82A of the Income Tax Act 1967, but that period runs from the end of the year of assessment. Service tax and tourism tax records must be kept for seven years from the latest date to which the record relates, in Malay or English, and kept in Malaysia unless the Director General of Customs approves otherwise (Service Tax Act 2018 section 24; Tourism Tax Act 2017 section 17). The two clocks do not expire together, so do not treat one retention period as discharging the other.

What that gives you at audit is not a report that says you complied — it is the working: which figures were checked, against which rule, on which night, and whether anyone changed them afterwards. See how the compliance checks run.