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Updated 6 September 2026. This article replaces our earlier guide to the phased MyInvois rollout. The exemption threshold has been raised twice since that was written — to RM1 million in December 2025, and to RM3 million on 30 August 2026. If you acted on the older guidance, please read on: you may have been preparing for an obligation that no longer applies to you.
If your business turns over less than RM3 million a year, the short version is this: you are probably exempt from issuing e-Invoices, and if you already started, you can stop.
That is a significant reversal from where things stood a few months ago, and it catches a lot of Malaysian SMEs who spent 2026 getting MyInvois-ready.
The quick version
- The exemption threshold is now RM3 million in annual turnover or revenue, up from RM1 million. This covers issuing e-Invoices and self-billed e-Invoices. [e-Invoice General Guideline v4.8, §1.6.1(e), dated 30 August 2026, effective 1 September 2026]
- If you already implemented, you may stop immediately. No application, no approval from LHDN needed.
- No penalty for the gap. If your implementation date passed and you never issued anything, no compliance action will be taken — provided you qualify.
- Turnover alone does not decide it. An ownership and group test (§1.6.10) disqualifies many small companies that look exempt on revenue.
- You can still opt in voluntarily, and LHDN encourages it.
Can we really just switch it off?
Yes — and LHDN says so directly. Its official e-Invoice FAQ now carries several worked examples on exactly this point:
"No separate application or prior approval from IRBM is required for taxpayers who are eligible to enjoy the exemption... the company may discontinue issuing e-Invoices immediately."
That answer is repeated for a company that implemented on 1 July 2026, a sole proprietor who implemented on 1 January 2026, and a business that had already discovered gaps in its submissions. In that last case, LHDN adds that the company is not required to participate in the e-Invoice SVDP for the missed invoices — the exemption simply removes the obligation.
What if we never implemented at all?
Also fine. The FAQ deals with this head-on: a sole proprietor with RM2.9 million revenue whose implementation date was 1 January 2026 and who did not issue any e-Invoice since then. LHDN's answer:
"As Ali is exempt from e-Invoice implementation, no e-Invoice compliance actions or penalties will be imposed."
So the window between the old RM1 million threshold and the new RM3 million one does not leave you exposed — as long as you actually meet the exemption criteria. Which brings us to the part most people miss.
The ownership test — where this goes wrong
This is the trap. Being under RM3 million is necessary but not sufficient. Under §1.6.10, the exemption does not apply if:
- You have a non-individual shareholder with annual turnover or revenue of at least RM3 million;
- You are a subsidiary of a holding company at or above RM3 million; or
- You have a related company or joint venture at or above RM3 million.
LHDN's own example: a company with RM400,000 revenue is still required to implement, purely because it is a subsidiary of a larger company that must implement.
What counts as "related" is broader than most directors assume:
| Structure | Related for e-Invoice? |
|---|---|
| Corporate shareholder holding 20% or more | Yes |
| Corporate shareholder below 20%, but with operational control | Yes |
| Two companies owned 100% by the same individual | No — the shareholder is an individual |
| Two companies sharing a common director who owns no shares | No — the test is at shareholder level |
That third row saves a lot of Malaysian family groups. That first row catches a lot of others.
Two more things that decide your number
Sole proprietors: all your businesses are added together. If you run several enterprises under your own name, the threshold applies to the combined turnover. LHDN's example totals three businesses at RM750,000 + RM820,000 + RM1,540,000 = RM3.11 million — over the line, despite no single business coming close.
Which figure to use. Audited financial statements where you have them (statement of comprehensive income); otherwise the revenue reported in your tax return for the relevant year.
If you grow past RM3 million later
The obligation returns, but not immediately. You must implement from 1 January in the second year following the year of assessment in which turnover first reached RM3 million. A business crossing the line in YA2026 implements from 1 January 2028 — time to prepare properly.
What we suggest doing now
- Confirm your turnover figure on the correct basis (audited accounts or tax return), and for sole proprietors, aggregate every business you own.
- Run the ownership test before you switch anything off. This is the step that creates real exposure — stopping when a corporate shareholder or holding company disqualifies you means non-compliance, not exemption.
- Document the conclusion. Keep the turnover calculation and a note on your shareholding structure, so the position is defensible later.
- Consider whether to stop at all. Some B2B customers expect validated e-Invoices, and if you are near RM3 million you may be back in scope within two years. Switching off and switching on again has its own cost.
This reflects LHDN's e-Invoice General Guideline v4.8 (30 August 2026) and the official e-Invoice FAQ as at the date of publication. The exemption threshold has changed three times in under a year, so confirm the current position before acting. The §1.6.10 ownership test is a per-company determination and is where most mistakes happen — talk to us before you stop issuing e-Invoices, or request a quote if you would like us to review your group structure.