LHDN e-invoice deadlines and phases by turnover
Updated 15 August 2026
Short answer
The LHDN e-invoice mandate applies by annual turnover: above RM100m from August 2024, RM25 to 100m from January 2025, RM5 to 25m from July 2025, and RM1 to 5m from 1 January 2026. Businesses under RM1 million are currently exempt.
The rollout by turnover
| Phase | Annual turnover | Mandatory from |
|---|---|---|
| 1 | Above RM100 million | 1 August 2024 |
| 2 | RM25m to RM100m | 1 January 2025 |
| 3 | RM5m to RM25m | 1 July 2025 |
| 4 | RM1m to RM5m | 1 January 2026 |
| Exempt | Below RM1 million | Voluntary |
Businesses under RM1 million
Businesses with annual turnover below RM1 million are currently exempt from the mandate. They may still adopt voluntarily to claim incentives or to serve B2B customers who require e-invoices.
The relaxation (grace) period
Each phase came with an interim relaxation period during which LHDN does not prosecute non-compliance, provided you are making a genuine effort, and consolidated e-invoices are allowed for all transactions. For Phase 4 (RM1m to RM5m) this relaxation has been extended to 31 December 2027, with full penalty enforcement from 1 January 2028. Treat it as time to get ready, not permission to skip.
The RM10,000 rule
From 1 January 2026, any single transaction above RM10,000 must be issued as an individual e-invoice with the buyer identified. It cannot be rolled into a consolidated e-invoice, even for a retail sale.
How to know which phase you are in
Your phase is set by annual turnover, generally referenced to your audited financial statements or tax return. If your turnover crosses a threshold, you move into the corresponding phase from its start date.
Get set up before your deadline
Frequently asked questions
When is e-invoicing mandatory for SMEs?
Businesses with RM1 million to RM5 million turnover are mandated from 1 January 2026 (Phase 4). Those above RM5 million are already mandated. Businesses under RM1 million are currently exempt.
Which e-invoice phase am I in?
Your phase is determined by annual turnover: above RM100m (Phase 1), RM25 to 100m (Phase 2), RM5 to 25m (Phase 3), RM1 to 5m (Phase 4). Below RM1 million is exempt.
Is there a penalty during the grace period?
During the relaxation period LHDN does not prosecute non-compliance if you are making a genuine effort, and consolidated e-invoices are allowed for all transactions. It is time to prepare, not a permanent exemption.
What is the RM10,000 rule?
From 1 January 2026, any single transaction above RM10,000 must be issued as an individual e-invoice with the buyer identified; it cannot be consolidated.
Are businesses under RM1 million exempt from e-invoicing?
Yes, currently. Businesses below RM1 million annual turnover are exempt from the mandate, though they may adopt voluntarily.