Who must issue e-invoices, and when
LHDN rolled out e-invoicing in phases based on annual turnover or revenue. This article explains which phase you fall into, who is exempt, and what the relaxation period means for smaller businesses.
This is general guidance, not tax advice. Confirm your own position with LHDN or a licensed tax agent.
The implementation phases
LHDN's e-Invoice Guideline (Version 4.8, published 30 August 2026) sets these mandatory dates:
| Annual turnover or revenue | Mandatory from |
|---|---|
| More than RM100 million | 1 August 2024 |
| More than RM25 million and up to RM100 million | 1 January 2025 |
| More than RM5 million and up to RM25 million | 1 July 2025 |
| Up to RM5 million (and at least RM3 million) | 1 January 2026 |
| Less than RM3 million | Exempt |
LHDN works out your phase from your 2022 figures: the turnover in your audited financial statements for financial year 2022, or the revenue in your tax return for year of assessment 2022 if you have no audited accounts. Once your date is set, a later change in turnover does not move it.
The RM3 million exemption
Since the August 2026 update, taxpayers with annual turnover or revenue below RM3 million are exempt from issuing e-invoices. This covers every type of taxpayer: individuals, partnerships, companies and co-operatives.
The exemption does not apply if your business:
- has a non-individual shareholder with turnover or revenue of at least RM3 million,
- is a subsidiary of a holding company with turnover or revenue of at least RM3 million, or
- has a related company or joint venture with turnover or revenue of at least RM3 million.
If you are exempt, your normal receipts are still valid proof of expense for your customers. You can also choose to issue e-invoices voluntarily.
New businesses
- Started between 2023 and 2025 with turnover of at least RM3 million: mandatory from 1 July 2026.
- Starting in 2026 or later: mandatory from 1 July 2026 or the day you start operating. If your first year's turnover is expected to be under RM3 million, your date is 1 January of the second year after the year your turnover reached RM3 million.
The interim relaxation period
Every phase got a relaxation period after its start date. For taxpayers with turnover up to RM5 million, it runs until 31 December 2027. During the relaxation period, LHDN's e-Invoice Specific Guideline (Version 4.9, section 16) allows you to:
- Issue a consolidated e-invoice for all your transactions, including industries that normally cannot consolidate.
- Issue a consolidated self-billed e-invoice for all self-billed circumstances.
- Put any description in the consolidated e-invoice, instead of listing receipt numbers.
- Decline a buyer's request for an individual e-invoice, as long as you file the consolidated one.
LHDN will not prosecute under Section 120 of the Income Tax Act 1967 during this period, provided you file the consolidated e-invoices. The relaxation is not a pause. You still need to submit.
What to do
- Find your 2022 turnover or revenue and match it to the table above.
- If you are mandated, set up envoice and connect your LHDN credentials.
- If you are in the RM3 million to RM5 million band, at minimum file a monthly consolidated e-invoice within 7 days after each month ends.
Sources
- LHDN e-Invoice implementation timeline (updated 30 August 2026)
- LHDN e-Invoice Guideline, sections 1.5 and 1.6
- LHDN e-Invoice Specific Guideline, section 16