Please note: This article is general information, last reviewed in October 2026. e-Invoice thresholds, timelines and guidelines have been revised several times. Always confirm current requirements on the official LHDN (Inland Revenue Board of Malaysia) e-Invoice pages or with your tax adviser before acting. This is not tax or legal advice.
If you run a business in Malaysia, you have probably heard about e-invoicing. The Inland Revenue Board of Malaysia (LHDN) has been introducing a national e-Invoice system in phases since 2024. Here is a plain-English explanation.
What is an e-Invoice?
An e-Invoice is not simply a PDF sent by email. It is an invoice in a structured digital format that is submitted to LHDN’s MyInvois system, validated, and returned with a unique identifier and a QR code. The validated e-Invoice is then shared with your customer.
How does it work?
- Your business creates the invoice in the required structured format
- It is submitted to MyInvois, either through the MyInvois portal or through your accounting or invoicing software connected by API
- LHDN’s system validates it
- A validated e-Invoice with a unique identifier and QR code is returned
- You share the validated invoice with your customer
Validated documents can generally be cancelled within a limited window (reported as 72 hours), so check the current guideline for details on corrections.
The implementation phases
Implementation has been phased by annual turnover or revenue. As reported from LHDN announcements:
| Phase | Annual turnover / revenue | Start date |
|---|---|---|
| 1 | Above RM100 million | 1 August 2024 |
| 2 | RM25 million to RM100 million | 1 January 2025 |
| 3 | RM5 million to RM25 million | 1 July 2025 |
| 4 | Up to RM5 million (above the exemption threshold) | 1 January 2026 |
A previously planned Phase 5 for the smallest businesses was cancelled following a December 2025 decision.
The exemption threshold
The exemption threshold has been raised more than once. It was raised from RM150,000 to RM500,000 in 2025, then to RM1 million in December 2025. More recently, LHDN’s updated guideline (version 4.8) is reported to have raised it to RM3 million of annual turnover or revenue, effective 1 September 2026. Businesses below the threshold are generally exempt, but there are conditions. For example, reports indicate the exemption may not apply if a corporate shareholder, holding company, related company or joint venture has turnover at or above the threshold. Read our dedicated article on the exemption for more detail.
Relaxation period
LHDN has provided interim relaxation periods after each phase starts. Phases 1 to 3 had six months. For Phase 4, the relaxation period has been extended to 31 December 2027. During this period, certain flexibilities apply, such as the ability to issue consolidated e-Invoices, and LHDN has indicated it will not initiate prosecution for non-compliance if the stipulated requirements are met. Full enforcement would follow after the period ends.
Who is affected, even if you are exempt?
Even if your own business is exempt, your customers or suppliers may be required to use e-Invoice. They may ask for your tax details or send you e-Invoices. Being ready makes dealing with them easier.
What should SMEs do now?
- Check your annual turnover against the current thresholds, including the conditions on related companies
- Confirm your status with your accountant or tax adviser
- Review your invoicing process and software
- Collect accurate customer and supplier tax details
- Ask your software provider how they support MyInvois
- Train your team on issuing, cancelling and correcting e-Invoices
- Run a test period before enforcement begins
Why this is also an opportunity
e-Invoicing pushes businesses to clean up customer data, standardise invoicing and connect systems. Many SMEs find that preparing for compliance also improves cash flow and reporting.
Key takeaway
e-Invoice rules have changed several times, so rely on official LHDN sources. Check your status, prepare your processes and use the relaxation period to get systems working properly.
FAQ
Is a PDF invoice enough?
For businesses in scope, invoices must go through MyInvois and be validated. A plain PDF does not meet this requirement on its own.
Do I need new software?
Not necessarily, but your system must be able to submit to MyInvois through supported methods.
Where can I get official information?
LHDN’s e-Invoice website and the MyInvois portal publish guidelines, FAQs and updates.
Need help applying this in your business? Alpha Ark Business Solutions helps Malaysian SMEs transform, automate and grow with practical digital systems and AI. Contact us to discuss your situation.