Last reviewed 18 September 2026
Malaysia's e-Invoicing regime has changed more in the past two years than most tax requirements do in a decade. The latest shift came on 30 August 2026, when the Inland Revenue Board of Malaysia (LHDN / Hasil) announced that the exemption threshold would rise from RM1 million to RM3 million of annual turnover or revenue, effective 1 September 2026. For many small and medium businesses that is the difference between a project and a non-event — but it does not apply to everyone, and it does not erase what has already been filed.
Where things stand now
- e-Invoicing has been in force since 1 August 2024, introduced in phases by annual turnover.
- From 1 September 2026, businesses with annual turnover or revenue below RM3 million are not required to implement e-Invoicing.
- Hasil estimates more than 1.1 million traders fall under the exemption, while continuing to encourage voluntary adoption.
- As at 30 August 2026, 265,379 taxpayers had submitted e-Invoices, covering over 1.84 billion e-Invoices in total.
- The operative reference documents are the e-Invoice Guideline (version 4.8, 30 August 2026), the e-Invoice Specific Guideline (version 4.9, 7 September 2026) and the General FAQs (updated 4 September 2026).
The threshold has moved four times since 2024 — RM150,000, then RM500,000, then RM1 million, now RM3 million. Treat any single number as a point-in-time position and confirm it before you act on it.
The exemption: what it does and does not cover
Turnover below RM3 million means your company is not obliged to issue e-Invoices. The exemption is not automatic for every small company, however. Under the guideline in force, it does not apply where:
- the taxpayer has a non-individual shareholder (or equivalent) with annual turnover or revenue of at least RM3 million;
- the taxpayer is a subsidiary of a holding company with annual turnover or revenue of at least RM3 million; or
- the taxpayer has a related company (as defined in section 2 of the Promotion of Investments Act 1986) or joint venture with annual turnover or revenue of at least RM3 million.
In practice this means a modest-sized Sdn Bhd can still be caught because of who owns it or what group it sits in. Test the position at entity level and again at group level, and re-test whenever the shareholding changes.
The implementation timeline
| Phase | Annual turnover or revenue | Mandatory from |
|---|---|---|
| Phase 1 | Above RM100 million | 1 August 2024 |
| Phase 2 | RM25 million – RM100 million | 1 January 2025 |
| Phase 3 | RM5 million – RM25 million | 1 July 2025 |
| Phase 4 | RM1 million – RM5 million | 1 January 2026 |
| Phase 5 | Up to RM1 million | Cancelled in December 2025; band now exempt |
Newly started businesses follow their own rule. Operations commencing from YA 2023 to YA 2025 with annual turnover of at least RM3 million implement by 1 July 2026. Those commencing from YA 2026 onwards implement by 1 July 2026 or on their commencement date; if the first year's turnover comes in below RM3 million, implementation falls on 1 January of the second year after turnover reaches RM3 million.
What an e-Invoice actually is
An e-Invoice is a structured digital file — XML or JSON — submitted to Hasil's MyInvois system for validation. It is not a PDF invoice emailed to a customer. The PDF a buyer receives is the visual representation of an e-Invoice that Hasis has already validated. There are two submission routes: the MyInvois Portal for lower volumes, and an API integration with your own accounting software for higher volumes.
- 01Create the e-Invoice data and submit it to MyInvois.
- 02Hasil validates the submission and returns a status.
- 03The validated e-Invoice, or its visual representation, is shared with the buyer.
- 04Rejections and cancellations are handled and re-submitted where needed.
- 05Validated e-Invoices are stored and retrievable for reporting and audit.
Self-billed e-Invoices
Some transactions have no supplier e-Invoice to receive, so the buyer issues one instead. Common examples are payments to agents, dealers and distributors, certain cross-border purchases, and expenses incurred by an employee on behalf of the employer. These are self-billed e-Invoices, and they are the part of the regime most often missed because nothing arrives in your inbox to remind you.
Consolidated e-Invoices
Where invoicing every transaction individually is impractical — retail and F&B, for instance — consolidated e-Invoices cover a batch of transactions over a period instead of one document per sale. During the interim relaxation periods, consolidated issuance was permitted more broadly, including for self-billed e-Invoices, with the transaction detail recorded in the product or service description.
Getting ready: a practical checklist
- 01Confirm your latest annual turnover or revenue, then check the RM3 million exemption against your own position — including shareholders, holding company and related companies.
- 02Make sure your TIN, SST registration and business particulars in Hasil's records are correct before you submit anything.
- 03Choose your route: MyInvois Portal, a direct API integration, or approved middleware connected to your accounting system.
- 04Clean up customer master data, the chart of accounts and pricing setup so required fields populate themselves rather than relying on typing.
- 05Map the awkward cases: credit and refund notes, discounts, returns, deposits, self-billed e-Invoices, and sales to individuals.
- 06Run one pilot month in parallel with your existing invoicing and reconcile before you switch over.
- 07Keep validated e-Invoices retrievable alongside the rest of your accounting records, and tell your finance team where they live.
If you are below RM3 million today
You are not required to implement e-Invoicing at the moment. Hasil still encourages voluntary participation, and there are good operational reasons to consider it: cleaner receivables, faster payment chasing and a book of record that is already structured. If you implemented earlier and now sit below the line, do not simply switch off — records already validated remain part of your tax documentation, and the exemption does not automatically unwind a working process. Talk it through with your advisers first.
How we work with clients on e-Invoicing
The firm hosted an e-Invoicing seminar at MH Hotel Ipoh on 26 April 2024 for clients and staff, led by our founder Mr. Yew Teck Huat, covering LHDN implementation timelines, readiness steps and common pitfalls. Today, e-Invoicing readiness and implementation support form part of our accounting and advisory work: monthly bookkeeping, management accounts and the underlying data structure are reviewed at the same time, so invoicing changes do not sit on top of a broken ledger.
This guide is general information for business owners, last reviewed on 18 September 2026. It is not tax advice, and the thresholds and dates above can change. Confirm your position with Hasil or your tax advisers before acting.
Common questions
- My turnover is RM2 million. Do I still have to issue e-Invoices?
- Under the guideline in force from 1 September 2026, businesses below RM3 million annual turnover are exempt — unless a shareholder, holding company or related company condition applies to you.
- We already implemented. Can we stop?
- Not automatically. e-Invoices you have already validated remain part of your records, and unwinding a working process usually costs more than keeping it. Take advice before switching off.
- Is a PDF invoice still acceptable?
- For e-Invoicing purposes the accepted format is XML or JSON submitted to MyInvois. The PDF your buyer receives is the visual representation of a validated e-Invoice, not the e-Invoice itself.
- What about payments to overseas suppliers?
- Cross-border purchases and certain service fees are handled through self-billed e-Invoices and the cross-border sections of the Specific Guideline. Treatment depends on whether the supply is made in or outside Malaysia.
- Does the exemption cover a director's personal expenses?
- Employment perquisites, benefits and expenses incurred by an employee on behalf of the employer have their own treatment in the Specific Guideline, and often require a self-billed e-Invoice.
Official sources
Always check the current position with the Inland Revenue Board of Malaysia before acting on anything in this guide.