e-Invoice Update
Malaysia Raised the e-Invoice Exemption Threshold to RM3 Million.
LHDN lifted the exemption from RM1 million to RM3 million on 1 September 2026 (Guideline 4.8). The number is the easy part. Section 1.6.10, the new group-ownership test, is what will catch firms out.
What Changed
Version 4.7 to Version 4.8
Announced in the National Day address. LHDN says 1.1 million more MSMEs now fall outside the mandate.
| Item | Guideline 4.7 | Guideline 4.8 |
|---|---|---|
| Exemption threshold | Below RM1 million | Below RM3 million |
| Self-billed e-Invoices | Within scope | Covered by the exemption where it applies |
| Group / ownership conditions | — | New Section 1.6.10 removes the exemption in defined cases |
| Businesses commencing 2023–2025 | 1 July 2026 at RM1 million | 1 July 2026 at RM3 million |
| Voluntary participation | Open to any taxpayer | Still open to any taxpayer |
Section 1.6.10
Under RM3 million is not automatically exempt
Section 1.6.10 lists the ownership situations where the exemption does not apply. Read it before telling any client they are out of scope.
A non-individual shareholder at RM3 million
If any corporate shareholder has turnover or revenue of RM3 million or more, the exemption is gone. The size of the company itself does not matter.
A holding company at RM3 million
A subsidiary of a holding company at RM3 million or more stays inside the mandate. Group structure decides, not entity size.
A related company or joint venture
Same rule for a related company or joint venture at RM3 million or more. "Related company" follows section 2 of the Promotion of Investments Act 1986.
So "under RM3 million" is not the whole test
A client at RM2 million turnover can still be inside the mandate. Map the shareholders, parent, related companies and JVs first. Keep the working papers.
Answered 4 September
Clients who already started may stop — immediately
LHDN answered this in its e-Invoice General FAQs, updated 4 September 2026. A business under RM3 million that meets the Section 1.6.10 criteria may stop issuing immediately — no application, no approval (Q17–Q20, with four worked examples). Continuing voluntarily is also fine.
Two details worth noting. A now-exempt business with omitted e-Invoices does not need the e-Invoice SVDP (Q19). And the exemption is not permanent: cross RM3 million later, and implementation restarts from 1 January of the second year after the YA you crossed it (Q20).
Before any client switches off: confirm the Section 1.6.10 test in writing, file the working papers, and keep the FAQ extract in the file. For clients who stay in scope, our MyInvois Portal guide for firms covers roles, intermediaries and switching between client taxpayers.
What It Means For The Books
The purchase side did not change
e-Invoice controls how a sale is reported to LHDN. It does not put anything into your client’s account book.
One thing this changes for firms: 1.1 million businesses will now never issue e-invoices. Their documents keep arriving as paper and PDF. The key-in work stays — which is why AI bookkeeping in Malaysia is a purchase-side story, not an e-invoice one.
That is the layer BalanceNow works on: reading supplier documents, keying them in, and posting approved entries straight into AutoCount and SQL Accounting. If you handle that work with spreadsheets today, the mechanics are written up in our guides to importing purchase invoices into AutoCount and into SQL Account.
If the reason you are reading this is that a client asked what their books should cost now, our bookkeeping fees calculator gives a 2026 benchmark by business profile.
Questions
e-Invoice threshold FAQ
- Is e-invoicing still mandatory in Malaysia?
- Yes, for businesses in scope — the scope just got smaller. From Guideline 4.8, turnover below RM3 million may qualify for exemption (previously RM1 million). Above RM3 million, or caught by the group-ownership test, the mandate still applies.
- What is the new e-Invoice exemption threshold and when did it take effect?
- RM3 million in annual turnover or revenue, effective 1 September 2026. Published in e-Invoice Guideline Version 4.8 (30 August 2026) after the National Day announcement. LHDN says over 1.1 million MSMEs benefit.
- Is my client exempt if turnover is under RM3 million?
- Not automatically. Section 1.6.10 keeps a company in the mandate if it has a corporate shareholder, holding company, related company or JV at RM3 million or more. Check the shareholding first, then document why the exemption applies.
- My client already started issuing e-Invoices. Can they stop now?
- Yes — LHDN confirmed it in the e-Invoice General FAQs updated 4 September 2026. A business under RM3 million that meets the Section 1.6.10 criteria may stop issuing immediately, with no application or approval needed, or keep issuing voluntarily. If turnover later reaches RM3 million, implementation restarts from 1 January of the second year after that YA.
- What is Section 1.6.10 of the e-Invoice Guideline?
- Section 1.6.10 is the new group-ownership test in Guideline 4.8. It removes the RM3 million exemption where the company has a non-individual shareholder, a holding company, or a related company or joint venture with turnover or revenue of RM3 million or more. In short: the RM3 million test is not just about the company itself.
- Does the exemption cover self-billed e-Invoices?
- Yes. Version 4.8 says qualifying taxpayers may be exempt from e-Invoices including self-billed ones. The Section 1.6.10 group test still has to be checked first.
- When does a newly started business have to comply?
- Started 2023–2025: comply from 1 July 2026, but only if turnover reaches RM3 million. Started 2026 or later: from 1 July 2026 or your start date; if first-year turnover stays under RM3 million, it defers to 1 January of the second year after you first cross RM3 million.
- Does e-Invoice remove the bookkeeping work for an accounting firm?
- No. e-Invoice reports sales to LHDN; it posts nothing into the account book. And with 1.1 million more businesses exempt, most supplier documents will keep arriving as paper and PDF that someone still keys in.
More on how we handle client documents in our general FAQ.
Sources
Where these facts come from
- LHDN e-Invoice Guideline (Version 4.8) and e-Invoice Specific Guideline (Version 4.8), published on the official HASiL portal.
- LHDN e-Invoice General FAQs (updated 4 September 2026) — Q17–Q20 on discontinuing after the threshold rise.
- 2026 National Day address by the Prime Minister, 31 August 2026.
- 中文版： 这篇指南的中文整理。
- Inland Revenue Board statement on the higher threshold, as reported by The Star, New Straits Times, The Edge Malaysia and BusinessToday, 30–31 August 2026.
This is a plain-language summary, not tax advice. The LHDN guideline is the authority. Confirm against the current version before acting for a client.
Last reviewed 7 September 2026 · BalanceNow team · Questions? hello@balancenow.com.my
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