Malaysia E-Invoicing Update: RM1 Million Exemption Threshold Announced for SMEs

The Malaysian Government has announced a significant update to the national e-Invoicing rollout—one that brings welcome relief to thousands of micro and small businesses.

On 6 December 2025, Prime Minister Datuk Seri Anwar Ibrahim confirmed that businesses with annual income below RM1 million may be exempted from mandatory e-Invoicing.

This update represents a revised, more inclusive approach to the digital tax transformation, acknowledging the concerns of micro-entrepreneurs and small retailers about the cost and readiness required to implement e-Invoicing.

What Has Changed?

Previously, under LHDN’s guideline (Version 4.5, July 2025), only businesses below RM500,000 annual turnover were exempted.

The newly announced LHDN’s guideline (Version 4.6, 7 Dec 2025) extends the exemption threshold to RM1 million, effectively widening the group of businesses who may have delayed obligations or be fully exempt—subject to finalised details from LHDN.

At a Glance: Old vs New Exemption Threshold

Note: Businesses that are part of larger corporate groups may still be required to comply regardless of turnover.

LHDN Mandatory e-Invoicing Timeline (NEW)

📅 Taxpayers with an annual turnover or revenue of more than RM100 million – 1 August 2024

📅 Taxpayers with an annual turnover or revenue of more than RM25 million and up to RM100 million – 1 January 2025

📅 Taxpayers with an annual turnover or revenue of more than RM5 million and up to RM25 million – 1 July 2025

📅 Taxpayers with an annual turnover or revenue of up to RM5 million – 1 January 2026

📅 Taxpayers with an annual turnover or revenue of less than RM1,000,000 – Exempted from e-Invoice implementation

What This Means for Your Business

✔ If your annual turnover is below RM1 million: You may now fall under the exemption category or receive extended implementation flexibility.

✔ If your turnover is above RM1 million: You remain within the mandatory rollout phases, and e-Invoicing compliance preparation should continue as planned.

✔ If you run multiple linked entities: Exemption may not apply. Group structure and related-party turnover will be considered.

Next Steps for All Businesses

✅ Monitor LHDN’s upcoming revised guideline for confirmed exemption conditions and new dates.

✅ Assess your turnover using your latest audited financials to understand your compliance position.

✅ Continue your digital readiness planning, even if exempt—early adoption helps reduce future cost and disruption.

✅ Explore e-Invoicing-ready solutions like Biztrak MSB and Biztrak Online to ease the transition.

👉 Talk to us today to learn how our Biztrak MSB and Biztrak Online can ease your e-Invoicing implementation