Effective Date: 1 July 2026
The implementation of Malaysia's e-Invoice initiative enters another important stage on 1 July 2026. Contrary to popular belief, this is not a new implementation phase. Rather, it is a special concessionary implementation date introduced by the Inland Revenue Board (LHDN) for the smallest group of businesses within the ≤RM5 million turnover category.
Many businesses mistakenly believe that all companies with annual turnover below RM1 million are automatically exempt. This is incorrect. While an annual turnover of RM1 million or below is the starting point, companies must satisfy all exemption conditions before they qualify to remain exempt.
A company is required to implement e-Invoice from 1 July 2026 if:
- It commenced business before YA2022; and
- It exceeded RM1 million annual turnover in any Year of Assessment (YA2023, YA2024 or YA2025); or
- It has annual turnover below RM1 million but fails any one of the exemption conditions prescribed by LHDN.
For these businesses, e-Invoice (including self-billed e-Invoice where applicable) becomes mandatory from 1 July 2026.
To remain exempt, a business with annual turnover of RM1 million or below must satisfy all four of the following:
LHDN's FAQs illustrate several practical scenarios. E-Invoice implementation starts 1 July 2026
Businesses required to implement e-Invoice should begin the process without further delay. They should:
The following groups generally remain exempt from the 1 July 2026 implementation:
Annual turnover alone does not determine e-Invoice obligations. Review your ownership structure, associated companies and exemption conditions before assuming your business is exempt.
