Is My Business Exempt from e-Invoice? The RM1 Million Threshold Explained

One of the most common questions Malaysian SME owners ask about e-Invoice is: "Does this apply to me?" The honest answer depends on your annual turnover — and there was a significant rule change in late 2025 that many business owners have not caught up with.

The Current Exemption Threshold

As of December 2025, businesses with annual turnover **below RM 1 million** are exempt from LHDN's e-Invoice mandate. This is the current floor.

Previously, LHDN had announced a plan to extend the mandate to businesses below RM 1 million (which would have brought in the majority of Malaysian SMEs). However, on 6 December 2025, the government announced that the sub-RM 1 million phase has been **cancelled** — the exemption floor stays at RM 1 million for now.

Who Is Currently Mandated

The rollout follows a phased schedule based on annual turnover:

• Phase 1 (1 Aug 2024): above RM 100 million
• Phase 2 (1 Jan 2025): RM 25 million – RM 100 million
• Phase 3 (1 Jul 2025): RM 5 million – RM 25 million
• Phase 4 (1 Jan 2026): RM 1 million – RM 5 million (with a 12-month relaxation period through 31 Dec 2026; enforcement penalties apply from 1 Jan 2027)

If your turnover falls below RM 1 million, you are currently exempt — you do not need to issue e-Invoices via MyInvois.

"Exempt" Does Not Mean "Forget About It"

A few important nuances:

**Your customers may require it.** If you supply goods or services to a business that is mandated (RM 1 million+), they may ask you to issue e-Invoices as part of their own compliance chain — particularly for B2B transactions. Being e-Invoice-ready makes you a better supplier.

**The rules can change.** The sub-RM 1 million phase was cancelled but not permanently ruled out. Keeping your systems ready means you are not scrambling if the mandate expands.

**Voluntary adoption is allowed.** Any business can voluntarily register and issue e-Invoices through MyInvois, even if not yet mandated. Some businesses find this simplifies their audit trail.

How to Verify Your Own Status

Your annual turnover for e-Invoice purposes is based on your most recent full financial year. If you are close to the RM 1 million threshold, it is worth confirming with your accountant which year's figures apply and whether you should be preparing for compliance proactively.

Always verify your exact obligations at the **official MyInvois portal (myinvois.hasil.gov.my)** or with LHDN directly — thresholds and timelines are set by LHDN, and this article reflects publicly available information as of June 2026.

Planning Ahead

If your turnover is approaching RM 1 million — or you are exempt but have customers who are mandated — now is a sensible time to review your invoicing setup. [Get a free digital checkup →](/digital-checkup) to see where you stand and what an e-Invoice integration would involve.