Updated 4 October 2026. LHDN raised the e-Invoice exemption floor from RM1 million to RM3 million in annual turnover, effective 1 September 2026 (media release dated 30 August 2026). The timeline below already carries the current figure. Whether a given business actually qualifies is a separate test — the exemption lapses if a non-individual shareholder, holding company, related company or joint-venture partner is itself at RM3 million or more. That test is worked through in our explainer, E-Invoice Exemption Below RM3 Million: The Group Test Decides.
Malaysia’s e-Invoicing mandate has changed three times since the original rollout plan was announced: the Phase 5 cohort was cancelled and the exemption floor raised in December 2025, the Phase 4 relaxation period was extended in April 2026, and in August 2026 LHDN raised the exemption threshold again — from RM1 million to RM3 million in annual turnover. If you last checked the rules in 2025, the numbers you remember are probably wrong. This page sets out the current timeline, who must comply, and what changed.
E-Invoicing Malaysia Timeline: The Current Phases
LHDN rolled out mandatory e-Invoicing through its MyInvois platform in phases based on annual turnover or revenue (per FY2022 audited financial statements). The table below reflects the e-Invoice guidelines as at September 2026.
| Phase | Annual turnover / revenue | Mandatory from | Status (Sep 2026) |
|---|---|---|---|
| Phase 1 | Above RM100 million | 1 August 2024 | Active — full enforcement |
| Phase 2 | RM25 million – RM100 million | 1 January 2025 | Active — full enforcement |
| Phase 3 | RM5 million – RM25 million | 1 July 2025 | Active — full enforcement |
| Phase 4 | RM3 million – RM5 million | 1 January 2026 | Active — relaxation period until 31 December 2027; full enforcement from 1 January 2028 |
| Below RM3 million | Under RM3 million | Exempt | Exempt under e-Invoice Guideline v4.8 (30 August 2026), subject to group conditions — see below |
Statutory bodies, statutory authorities, local authorities and international organisations are separately required to issue e-Invoices for goods sold and services performed from 1 July 2025. Businesses that commenced operations between 2023 and 2025 must implement e-Invoicing from 1 July 2026 where their annual turnover or revenue reaches RM3 million; businesses commencing from 2026 follow the same RM3 million trigger.
What Changed and When: 2025–2026
December 2025 — Phase 5 cancelled, exemption floor raised to RM1 million
The originally planned Phase 5 (businesses with turnover between RM500,000 and RM1 million, slated for 1 July 2026) was cancelled. The exemption threshold was raised from RM500,000 to RM1 million, effective 1 January 2026.
April 2026 — Phase 4 relaxation extended to 31 December 2027
Phase 4 businesses (then defined as RM1 million to RM5 million) had a six-month penalty-free relaxation window after the 1 January 2026 start date. In April 2026, via the updated e-Invoice Specific Guideline, the government extended that relaxation by a further year — it now runs to 31 December 2027, with full enforcement from 1 January 2028. During the relaxation period, businesses may issue monthly consolidated e-Invoices for qualifying transactions, use general product descriptions, and avoid penalties for initial non-compliance — provided they have registered on MyInvois and are making a genuine effort to comply.
August 2026 — exemption floor raised to RM3 million
On 30 August 2026, LHDN published e-Invoice Guideline Version 4.8, which exempts taxpayers with annual turnover or revenue of less than RM3 million from issuing e-Invoices (including self-billed e-Invoices). This is the second increase in under a year and moves a large share of Malaysian SMEs out of the mandate entirely. According to LHDN, more than 265,000 taxpayers had submitted over 1.84 billion e-Invoices by the end of August 2026, and the new threshold is expected to exempt more than 1.1 million businesses.
The exemption is not a simple revenue test. Under Section 1.6.10 of Guideline v4.8, the below-RM3-million exemption does not apply where the taxpayer has a non-individual shareholder, a holding company, a related company or a joint-venture partner with annual turnover or revenue of RM3 million or more. A subsidiary with RM2 million of its own revenue can still be inside the mandate if its group crosses the line. Check the group structure before standing anything down — our walkthrough of the group test sets out the five checks in order.
Businesses between RM1 million and RM3 million that already started issuing e-Invoices under the previous threshold may discontinue if they satisfy the exemption conditions — no separate LHDN application is required — though continuing voluntarily remains an option, and qualifying voluntary implementation costs are deductible (up to RM50,000 per year of assessment for YA2024–YA2027).
The RM10,000 Rule Applies Regardless
One rule survived every extension: from 1 January 2026, any single transaction of RM10,000 or more requires its own individual e-Invoice and cannot be consolidated into a monthly submission. This applies to all businesses, in all phases, including during the relaxation period. A buyer can also request an individual e-Invoice at any time.
What the Timeline Means for Small Businesses
The extensions change the pace of compliance, not the direction. For businesses now exempt, the practical questions are whether the group carve-outs apply and whether turnover is approaching RM3 million. For businesses still inside Phase 4, the relaxation period is preparation time: register on MyInvois, test the workflow, and train staff before full enforcement begins on 1 January 2028.
Actions worth taking during the relaxation window
- Confirm your obligation first. Check your own turnover against the RM3 million line — then check your shareholders, holding company and related companies. The exemption test is a group test.
- Register on MyInvois. Registration is a minimum requirement even during the relaxation period. Submission is via the MyInvois Portal (manual, suited to low volumes) or API integration for higher volumes.
- Review your invoicing workflow. Map how invoices move through the business today, where manual entry creates errors, and what e-Invoicing would change. This baseline makes any software decision easier.
- Evaluate software early. Local providers offer compliant packages across a wide price range. Compare integration options (portal, POS, API, batch upload) against your actual volume rather than buying capacity you will never use.
- Watch the penalty regime. Penalties for non-compliance run from RM200 to RM20,000 per invoice. The Special Voluntary Disclosure Programme (SVDP) allows missed or erroneous e-Invoices to be back-filed penalty-free from 7 July 2026 to 31 December 2027.
Frequently Asked Questions
Is e-Invoicing mandatory in Malaysia in 2026?
Yes, for businesses with annual turnover or revenue of RM3 million or more (subject to the group conditions). All four phases above RM3 million are live. Businesses below RM3 million are exempt under Guideline v4.8.
When does full enforcement start?
For Phase 4 businesses, the penalty-free relaxation period runs until 31 December 2027. Full enforcement begins 1 January 2028.
Do I have to stop issuing e-Invoices if I am now exempt?
No. Exempted businesses may continue issuing e-Invoices voluntarily, and LHDN encourages voluntary adoption. Whether to stop is a business decision, provided the exemption conditions are met.
What about transactions above RM10,000?
Each such transaction needs its own individual e-Invoice immediately — no consolidation, no deferral, regardless of phase or relaxation status.
Need compliant invoicing software? JomeInvoice covers LHDN MyInvois compliance for retail, e-commerce and enterprise workflows, with API, POS and batch upload options.
Or, you can easily reach out to our team for further assistance via WhatsApp using the following link:
- Sue: https://wapp.my/60187880118/
- Hooi Min: https://wapp.my/60184715660/
