Malaysia Raises e-Invoicing Exemption Threshold to RM1 Million (Effective 2026)
The Malaysian government, through the Prime Minister’s Office, has announced a major update for small and medium enterprises (SMEs). Starting in 2026, the mandatory e-invoicing exemption threshold will increase from RM500,000 to RM1 million.
This move aims to reduce compliance pressure on smaller businesses as Malaysia rolls out the national e-Invoicing System (MyInvois).
1. What Changed: Exemption Threshold & Scope
The government has doubled the exemption threshold. Previously, only businesses with annual revenue below RM500,000 qualified for exemption. From 2026, businesses with annual revenue up to RM1 million will qualify.
As a result, many micro-enterprises and small businesses will no longer need to adopt e-invoicing in the near term.
The government made this decision after receiving feedback from small business owners. Many highlighted concerns about implementation costs and system complexity.
2. Revised e-Invoicing Rollout Timeline
Under the updated MyInvois rollout plan, the implementation schedule is as follows:
| Annual Revenue / Sales | Mandatory e-Invoice Start Date / Status |
|---|---|
| Above RM100 million | Required since Phase 1 (2024) |
| RM25 million – RM100 million | Earlier phases (2025) |
| RM5 million – RM25 million | 1 July 2025 (Phase 3) |
| RM1 million – RM5 million | 1 January 2026 (Phase 4) |
| Up to RM1 million | Exempt under new threshold (from 2026) |
SMEs with revenue of RM1 million or below now have more time to prepare. They are no longer required to adopt e-invoicing under the revised threshold.
3. Why the Government Made This Adjustment
Small business owners played a key role in shaping this policy change. Many raised concerns about system costs, training needs, and administrative workload.
After reviewing this feedback, the government adjusted the threshold to give SMEs more time to adapt. The revised approach offers a more practical and manageable compliance path.
This adjustment helps ensure digital invoicing does not place an unfair burden on smaller operators with limited resources.
4. Checklist: What SMEs Should Do Now
SMEs should take the following steps:
-
Review your last 12-month revenue to confirm whether you qualify under the RM1 million exemption.
-
If revenue is below RM1 million:
Maintain proper bookkeeping. The exemption does not remove the need for accurate records, especially for tax reporting. -
If revenue is between RM1 million and RM5 million:
Start assessing e-invoice readiness. Choose MyInvois-compatible software, plan workflow changes, and train staff. -
For fast-growing businesses:
Consider early voluntary adoption to avoid last-minute implementation issues. -
Include compliance planning in your financial budgets and accounting system upgrades.
Final Words
By raising the e-invoice exemption threshold to RM1 million, the Malaysian government acknowledges the operational realities faced by SMEs. The decision provides welcome relief while keeping the long-term goal of digital invoicing on track.
For businesses below RM1 million in turnover, there is no immediate pressure to adopt e-invoicing. However, as your business grows, early planning will help ensure a smooth transition in the future.
Disclaimer: This article is for informational purposes only and does not constitute professional advice. Please contact our professional advisory team for personalised guidance.
English 
Chinese