LHDN e-Invoicing 2026: What the New RM3 Million Threshold Means for Your Systems

Malaysia's e-Invoicing rollout has been a moving target for SMEs since it began, and the most recent change is a significant one: on 30 August 2026, the government announced the exemption threshold would rise from RM1 million to RM3 million in annual income or sales, effective 1 September 2026 — a change expected to benefit well over a million businesses.

What changed

e-Invoicing has been rolling out in phases since August 2024, starting with the largest corporations and working down through progressively smaller revenue bands. The threshold below which a business is fully exempt had already moved once, from RM500,000 to RM1 million, and has now moved again to RM3 million — a much larger jump than the previous adjustment.

Are you actually exempt now?

Exemption is based on annual income or sales, not business size in any other sense. If your business turns over less than RM3 million a year, you now fall outside the mandatory e-Invoicing requirement under this threshold. Businesses above that figure remain on the phased mandatory schedule based on their revenue band — this is a moving regulatory area, so treat this as a summary rather than a substitute for checking your specific phase and obligations directly with LHDN or your accountant.

Exempt doesn't mean ignore this

A higher threshold removes the immediate mandate, but two things are worth keeping in mind. First, some businesses choose to adopt e-Invoicing voluntarily regardless of exemption, particularly if larger customers or suppliers expect it. Second, revenue thresholds cut both ways — a growing business can cross RM3 million and move into scope with little warning if nobody's tracking it.

What we check on the IT side, regardless of exemption status

We don't implement e-Invoicing software directly, but the infrastructure it depends on — accounting and invoicing systems that are current and properly licensed, reliable connectivity for whatever integration is eventually required, and network and server infrastructure that isn't already a bottleneck — is squarely within managed IT and infrastructure audit territory. If e-Invoicing readiness becomes relevant to your business, whether now or after you cross the threshold, that's worth having reviewed as part of a general IT infrastructure audit rather than left until a compliance deadline forces the question.

Source: Over 1.1 million businesses to benefit from higher e-invoicing threshold, says LHDN, The Star, 30 August 2026.