LHDN e-invoicing (MyInvois) for Malaysian SMEs: what you need to know
The e-invoice rules changed again in 2026. Here is who must issue e-invoices through MyInvois, who is exempt, and what to do if your turnover is close to RM3 million.
Malaysian businesses must issue e-invoices through LHDN's MyInvois system on a phased timetable. As of October 2026, businesses with annual turnover below RM3 million are exempt if they meet LHDN's conditions. Those above it, or linked to a larger group, must comply. LHDN has said it won't take penalty action during the interim relaxation period, which runs until 31 December 2027 for the smallest phases.
If you run a small business in Malaysia, you have probably heard three different versions of the e-invoice rules from three different people. That's understandable: LHDN (the Inland Revenue Board of Malaysia, IRBM) has changed the thresholds and dates several times since 2024, most recently when the exemption threshold went up to RM3 million. This guide sets out the position as LHDN's own FAQ states it, updated on 4 September 2026, in plain terms.
What is an e-invoice (e-invois) in Malaysia?
An e-invoice is a structured digital record of a sale, in XML or JSON format, that is checked by LHDN before it counts as valid. A PDF or a photo of an invoice is not an e-invoice.
The supplier sends the invoice data to LHDN's MyInvois system. LHDN validates it, usually within seconds, and gives it a Unique Identifier Number. The supplier then shares the validated e-invoice, or a printable version with LHDN's QR code on it, with the buyer. You can submit through the MyInvois Portal by keying in invoices, or through an API connection from your accounting or invoicing software. You can use both, as long as the same invoice isn't sent twice.
Who must issue e-invoices in Malaysia?
Every business carrying on commercial activity in Malaysia falls under e-invoicing, but on a phased timetable based on annual turnover or revenue. The official phase dates are:
| Annual turnover or revenue | Implementation date |
|---|---|
| More than RM100 million | 1 August 2024 |
| More than RM25 million, up to RM100 million | 1 January 2025 |
| More than RM5 million, up to RM25 million | 1 July 2025 |
| Up to RM5 million | 1 January 2026 |
For most businesses, the turnover that decides your phase is the annual turnover or revenue in your financial year 2022 audited financial statements. If you don't have audited accounts, LHDN uses the revenue reported in your tax return.
Is my business exempt from e-invoicing if turnover is below RM3 million?
Yes, usually. As of LHDN's September 2026 FAQ, businesses with annual turnover or revenue below RM3 million are exempt from issuing e-invoices, including self-billed e-invoices. The threshold was raised from RM1 million to RM3 million following the Prime Minister's announcement. The exemption covers sole proprietors, partnerships, companies and co-operatives alike.
The exemption does not apply if your business:
- has a non-individual shareholder (for example, a company) with annual turnover or revenue of at least RM3 million;
- is a subsidiary of a holding company with annual turnover or revenue of at least RM3 million; or
- has a related company or joint venture with annual turnover or revenue of at least RM3 million.
Two points catch people out. First, a sole proprietor's turnover is added up across all the businesses registered in their name. Three small shops at RM750,000, RM820,000 and RM1.54 million together come to RM3.11 million, which is over the line. Second, if you are a small subsidiary of a group that already issues e-invoices, the small size of your own company doesn't help you.
If you started issuing e-invoices before the threshold went up and you now qualify for the exemption, LHDN says you may stop.
When do I start if my turnover crosses RM3 million later?
You start on 1 January of the second year after the year of assessment in which your turnover reaches RM3 million. This gives you a full year to prepare.
Example: A Klang Valley trading company (a Sdn Bhd with a December year end) crosses RM3 million in sales in August 2026. Its YA 2026 turnover is over the threshold, so it must start e-invoicing on 1 January 2028.
Businesses below RM3 million that don't meet the exemption conditions (such as a small subsidiary of a larger group) generally have a concessionary implementation date of 1 July 2026, or their date of commencing operations if later.
Is there still a grace period for e-invoice penalties?
Yes. LHDN gives every phase an interim relaxation period during which it does not take action for non-compliance as long as you follow the relaxed rules. For businesses with turnover up to RM5 million (implementation dates of 1 January 2026 and 1 July 2026), the relaxation period runs until 31 December 2027.
During the relaxation period you can, for example, issue consolidated e-invoices more widely than normal. You still have to submit those consolidated e-invoices monthly, not once at the end of the period. If your system is ready, you can skip the relaxed treatment and issue individual e-invoices straight away.
LHDN has also opened an e-invoice Special Voluntary Disclosure Programme (SVDP) from 7 July 2026 to 31 December 2027 for businesses that want to correct past e-invoice mistakes.
What is a consolidated e-invoice and when can I use one?
A consolidated e-invoice combines all the sales in a month where the buyer didn't ask for an e-invoice, typically retail customers, into one e-invoice submitted to MyInvois. It has to be issued within 7 calendar days after the month ends.
From 1 January 2026, any single transaction worth more than RM10,000 cannot go into a consolidated e-invoice. It needs its own e-invoice. Some industries and transaction types cannot be consolidated at all; these are listed in section 3.7 of LHDN's e-Invoice Specific Guideline.
Example: A Penang café that has to e-invoice sells mostly to walk-in customers. It can submit one consolidated e-invoice for the month's counter sales by the 7th of the next month, but a corporate customer who wants an e-invoice for a RM12,000 catering order must get an individual one.
What details do I need from my customers?
You need the buyer's tax identification number (TIN) and business registration number. Companies registered with SSM use the new 12-digit registration number. LHDN provides general TINs for situations where a buyer genuinely doesn't have one, such as some foreign buyers, but it is your responsibility to check first.
Collect these details when you set up the customer. Missing or wrong buyer details are a common reason an e-invoice fails validation.
How do I correct a validated e-invoice?
You can cancel a validated e-invoice within 72 hours of validation and issue a new one. After 72 hours, you can't edit or cancel it; you issue a credit note, debit note or refund note e-invoice that refers to the original. You can also use a credit or debit note within the 72 hours if you prefer.
What is the penalty for not issuing an e-invoice?
Failing to issue an e-invoice is an offence under section 120(1)(d) of the Income Tax Act 1967. The fine is between RM200 and RM20,000, or imprisonment of up to six months, or both, for each non-compliance. Because it applies per invoice, the exposure adds up quickly.
How should a small business prepare?
- Work out your annual turnover figures for the relevant years, and check your group structure against the exemption conditions.
- If you are exempt, keep a note of how you worked it out, and watch your turnover each year.
- If you are not exempt, collect TINs and registration numbers from your regular customers now.
- Decide whether you will key invoices into the MyInvois Portal or submit from your invoicing software through the API. Portal entry works for a handful of invoices; it gets tedious beyond that.
- Keep your validated e-invoices with the rest of your records. See how long Malaysian businesses must keep records.
Tools such as HumbleBear can submit e-invoices to MyInvois from the invoice itself and check the buyer's TIN and SST details before sending, which saves re-keying the same invoice twice.
Frequently asked questions
Do sole proprietors in Malaysia need to issue e-invoices?
Only if their total annual turnover is RM3 million or more, or they fail the exemption conditions. For sole proprietors, LHDN adds together the turnover of every business registered in the owner's name. If the total is below RM3 million and the conditions are met, the owner is exempt.
Is a PDF invoice an e-invoice?
No. An e-invoice is a structured XML or JSON file validated by LHDN through MyInvois. You can still send your customer a PDF, but it should be the visual version of a validated e-invoice, with LHDN's QR code on it.
Can I use the MyInvois Portal instead of software?
Yes. LHDN allows submission through the MyInvois Portal, through an API from your software, or both, provided you don't submit the same invoice twice. The portal suits businesses with a low volume of invoices.
Will I be penalised if I haven't started e-invoicing yet?
For businesses with turnover up to RM5 million, LHDN's interim relaxation period runs until 31 December 2027. If you are exempt under the RM3 million threshold, LHDN says no compliance action or penalties will be imposed. If you are not exempt, use the relaxation period to get ready rather than relying on it.
Can I still claim tax deductions on purchases without an e-invoice?
LHDN's FAQ says taxpayers can continue to claim tax deductions using existing documentation until the law is amended. Keep proper supporting documents for every purchase either way.
