On August 30, 2026, Prime Minister Datuk Seri Anwar Ibrahim announced that Malaysia would raise the e-invoice exemption limit from RM1 million to RM3 million. HASiL confirmed the change in a media release that day and said it could benefit more than 1.1 million businesses. However, annual turnover revenue alone may not determine whether a business qualifies.
The Inland Revenue Board of Malaysia also published General Guideline v4.8 on August 30. This guide and later HASiL FAQs can help you check your company’s position. Ownership links, related entities, and joint ventures may affect how turnover is assessed, so don’t change your invoice process based on revenue alone.
This article explains the new limit, how turnover revenue may be assessed, and which implementation dates and compliance milestones still matter. It also covers practical steps to take before changing how your business issues e-invoices. A quick eligibility check now can help you plan with confidence.
Key Takeaways
- Malaysia raised the exemption limit from RM1 million to RM3 million.
- HASiL expects the change to benefit more than 1.1 million businesses.
- Eligibility may depend on ownership links and related entities, not revenue alone.
- Review General Guideline v4.8 and later HASiL FAQs for current guidance.
- Check key dates and compliance duties before changing your invoice process.
What Changed in Malaysia’s e-Invoice Exemption Rules
Malaysia’s latest invoicing update resets the revenue test many smaller firms use to plan compliance. General Guideline v4.8, dated August 30, 2026, replaced v4.7, issued July 7. It raises the exemption threshold from below RM1 million to below RM3 million based on annual turnover or revenue.
How the limit moved upward
Section 1.6.1(e) sets out the revised test. The guideline’s summary records two amendments and two additions, giving businesses a clear reason to review older advice before changing their invoice process.
What the latest guidance clarifies
Sections 1.6.9 and 1.6.10 add rules for public bodies and ownership or group links. General FAQs dated September 4, 2026, explain effective timing and conditions eligible taxpayers must meet. Check current Inland Revenue Board publications, as later updates may affect implementation.
| Guidance | What changed | Why it matters |
|---|---|---|
| v4.7, July 7, 2026 | Earlier revenue limit | Older advice may no longer apply |
| v4.8, August 30, 2026 | Revised limit and added criteria | Review turnover and ownership details |
| General FAQs, September 4, 2026 | Clarified timing and eligibility conditions | Check current compliance steps |
What the e-Invoice Threshold RM3 Million Means for SMEs
For Malaysian SMEs, the revised limit offers a chance to simplify invoicing. Still, a revenue figure alone does not confirm eligibility. Check the applicable criteria before changing your invoice process or implementation plan.
Who may qualify for the exemption
Taxpayers with annual turnover or revenue below RM3 million may qualify under Section 1.6.1(e), if they meet the other rules. The exemption covers individuals, partnerships, companies, and cooperatives. However, links to a wider group may affect the result; the next section explains how.
How annual turnover or revenue is assessed
The records used depend on whether the taxpayer has audited financial statements. If so, use the Statement of Comprehensive Income for the relevant period. If not, check annual revenue reported in the income tax return for the applicable year of assessment.
September 2026 frequently asked questions offer added guidance on the exemption threshold. Compare your records with the current rules before stopping e-invoice issuance. A careful review can help prevent a costly change made too soon.
How Shareholders and Group Relationships Affect Eligibility
A small sales figure does not always settle a Malaysian company’s e-invoice status. Section 1.6.10 lists cases where a taxpayer may not claim the exemption, even if its own annual turnover is below RM3 million.
Ownership and parent-company links
The rules cover a qualifying non-individual shareholder and a holding company. A subsidiary may therefore fall within the mandate when a parent or connected entity meets the stated test. Check ownership links as well as revenue.
Related companies and joint ventures
A related company or joint venture with annual revenue of at least RM3 million can affect eligibility. The guideline refers to section 2 of the Promotion of Investments Act 1986 for the meaning of “related company.” HASiL’s FAQs give examples that include common direct or indirect control and a company holding at least 20% of another company’s issued share capital.
Before relying on the exemption threshold, review the full group structure, shareholders, and relevant revenue figures. This step can help businesses avoid changing invoice processes too soon.
| Connection | Example in the guidance | Eligibility check |
|---|---|---|
| Ownership | Non-individual shareholder or holding company | Review shareholder and parent links |
| Related entity | Common control or 20% shareholding | Check connected companies |
| Joint venture | Annual revenue of at least RM3 million | Confirm venture revenue |
When Businesses Must Start Issuing e-Invoices
Choosing a start date depends on when a business began and which year its records cover. Confirm these details before setting up your invoice process. A later change in sales does not reset a date already assigned.
Dates for businesses that meet the revenue test
Businesses that began operations from 2023 to 2025, with annual turnover revenue of at least RM3 million, must begin e-invoice implementation on July 1, 2026. This applies even if their current turnover later falls.
For businesses starting in 2026 or later, e-invoices begin on July 1, 2026, or on the operation commencement date, as applicable. Check the start date for your business and the records used for tax reporting.
Rules for new businesses and operations
HASiL gives the example of a company reaching RM3 million in Year of Assessment 2027. It must issue e-invoices from January 1, 2029. The relevant year of assessment helps set the timeline.
Under Section 1.5, once a taxpayer’s implementation date is set, later changes in annual turnover or revenue do not change that obligation. Before choosing a timeline, confirm:
- the year of assessment and financial records;
- the business or operation commencement date;
- the applicable compliance start date.
These checks can help your company plan ahead with confidence.
What to Consider Before Stopping e-Invoice Issuance
Before changing your process, check your annual turnover revenue, ownership links, and related entities. These details help confirm whether your company meets the rules and avoids a group carve-out.
When an eligible business can stop issuing
HASiL FAQ 17, dated September 4, 2026, says an eligible taxpayer may stop issuing e-invoices without a separate application or prior approval.
“An eligible taxpayer does not need a separate application or prior approval to cease issuing e-invoices.”
Keep evidence and review your system
Keep tax and accounting records that show your revenue meets the RM3 million exemption criteria and that no group rule applies. If your turnover revenue is below the exemption threshold, save the documents used to confirm eligibility. This can support your compliance position if questions arise.
Review your accounting system settings, too. An automated system may keep sending submissions after your process changes. Businesses already issuing invoices should verify their status before updating settings. Stopping required issuance is not the same as opting in: taxpayers may still join voluntarily, regardless of annual turnover. Check current guidance before changing your implementation plan.
Which e-Invoice Deadlines and Compliance Rules Remain Unchanged
The RM3 million exemption does not reset every existing compliance date. Review the e-invoice implementation rules that still apply to your sales and services.
Phase Four dates and the relaxation period
Phase 4 remains set for January 1, 2026, for applicable businesses with annual turnover up to RM5 million, subject to exemption criteria. The relaxation period runs through December 31, 2027. Penalty enforcement starts on January 1, 2028.
The Special Voluntary Disclosure Programme remains open from July 7, 2026, through December 31, 2027. Taxpayers can review the program’s terms while they prepare their records.
Consolidated e-Invoices and individual transactions
Consolidated e-invoices remain subject to transaction rules. From January 1, 2026, transactions above RM10,000 require an individual e-invoice. This rule covers relevant sales of goods and services, even when a business usually groups eligible sales.
Before changing an invoice process, check the Inland Revenue Board’s current guidance. The new exemption may not change other tax duties or your assigned implementation date. Keep revenue records current and confirm each compliance step. A quick review can help prevent missed obligations.
Practical Steps to Prepare Your SME for the Updated Rules
A short review can help your team make a safe choice and keep records ready. Confirm eligibility first, then adjust your process only when the rules support the change.
Review revenue, ownership, and group structure
Ask finance staff to compare annual turnover revenue with audited statements or tax returns. Check it against the RM3 million limit, then review shareholders, any holding company, related company, and joint ventures. This gives a fuller view of the exemption threshold and group links.
Check your invoicing processes and system settings
- Confirm whether accounting settings still send e-invoices automatically.
- Keep receipts and supporting records; section 1.6.2 accepts normal receipts as proof of expense for buyers.
- Change system procedures only after eligibility is clear.
For smoother e-invoice implementation, check how your accounting tools connect with ERP, POS, and online sales platforms. JomeInvoice describes integrations through API, SFTP, and webhooks.
Monitor LHDN guidance for further updates
Review current HASiL guidance and FAQs 15 and 19. They state that eligible taxpayers below RM3 million need not implement e-invoicing or join the SVDP. Keep a dated record of your review to support compliance if your business status changes.
Tax Incentives to Review Before Changing Your e-Invoice Setup
Before changing an invoice setup, check for relief that may lower costs. The RM3 million exemption, revenue, and turnover do not decide access to tax incentives. Each has its own threshold and rules.
Potential deductions and capital allowances
Several measures may help eligible Malaysian businesses manage software costs. P.U. (A) 162/2026 provides accelerated capital allowances for qualifying ICT equipment and computer software used in implementation. For YA 2024–2027, the rates are an initial allowance (IA) of 20% plus an annual allowance (AA) of 40%, subject to conditions.
- P.U. (A) 163/2026 covers qualifying customized software development, including specified consultation and incidental fees. It offers the same allowance rates for YA 2024–2027, subject to conditions.
- P.U. (A) 193/2025 provides an ESG-related tax deduction of up to RM50,000 per year of assessment for qualifying MSME spending in YA 2024–2027.
- These measures are not interchangeable. Check eligible costs, dates, and requirements for your company before claiming tax relief.
A change in business size or compliance status does not confirm that an expense qualifies. Review the relevant legislation and ask a qualified tax professional before changing your setup or making a claim.
How Voluntary e-Invoicing Can Support Business Operations
The guideline lets any business use e-invoicing voluntarily, even when it qualifies for the RM3 million exemption. Annual revenue or turnover does not prevent participation. A team may keep its e-invoice process if it helps daily work.
A consistent invoice workflow can keep transaction details aligned across sales, finance, and accounting. This can make it easier to review e-invoices and share clear records with customers.
Businesses can submit through the MyInvois Portal or connect an existing system by API. JomeInvoice also describes middleware links to ERP, POS, e-commerce, and accounting tools through API, SFTP, or webhooks. These options may reduce manual entry across services.
Before choosing voluntary implementation, weigh customer needs and operational benefits against tax and compliance duties. Choose the route that fits your processes, and confirm that your system can support it. Voluntary participation is a business choice, not a replacement for checking current requirements.
| Option | How it works | Useful for |
|---|---|---|
| MyInvois Portal | Submit each e-invoice through the portal | Teams that prefer a direct process |
| API connection | Send data from an existing platform | Businesses seeking a connected workflow |
| Middleware | Link ERP, POS, e-commerce, or accounting tools | Operations using several systems |
Conclusion
The RM3 million exemption may ease compliance for eligible SMEs, but annual turnover revenue alone does not decide status. Review turnover revenue, annual turnover, and your full ownership structure, including qualifying shareholders and related entities.
Use General Guideline v4.8, dated August 30, 2026, and HASiL FAQs, dated September 4, 2026, to confirm whether the RM3 million exemption applies. A group link can change a company’s status, even when its own revenue is low. Phase 4 remains set for January 1, 2026, and the relaxation period ends December 31, 2027.
Before changing e-invoice procedures or implementation plans, verify your circumstances and keep supporting records. If questions remain, seek qualified tax advice. Confirm your position before changing your business process.
