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31 August 2026

E-Invoice Exemption Raised to RM3 Million: What Actually Changes on 1 September 2026

Announced in the Prime Minister's National Day address on 30 August 2026 and effective 1 September: businesses under RM3 million turnover are exempt from e-invoicing. Here is who this covers, who still faces the 31 December deadline, and what remains unanswered.

What was announced

In the 2026 National Day address on 30 August, Prime Minister Anwar Ibrahim announced that the e-invoice implementation threshold rises from RM1 million to RM3 million in annual revenue or sales, effective 1 September 2026. LHDN estimates more than 1.1 million MSMEs benefit from the exemption.

This is the second increase in under a year — the threshold went from RM500,000 to RM1 million in December 2025, and now to RM3 million.

Who is exempt now

  • Annual turnover below RM3 million ⇒ exempt from the obligation to issue e-invoices. This now covers most freelancers, sole proprietors, and small companies.
  • RM3–5 million ⇒ still mandated. This band came under the mandate on 1 January 2026, with the relaxation (grace) period running to 31 December 2026. As of this writing, LHDN has not announced any change to that timeline — plan on the published date.
  • Above RM5 million ⇒ nothing changes. Earlier phases remain fully in force.

The questions LHDN hasn't answered yet

The announcement is fresh, and the updated LHDN guideline/FAQ was not yet published when this article went up. Three practical questions to watch:

  1. I'm RM1–3M and already implemented — can I stop?Businesses in this band were mandated since January. Whether they may cease issuing, and from when, needs LHDN's written confirmation. Until then, the safe course is to keep issuing.
  2. Does voluntary participation remain open? Under previous threshold changes, exempt businesses could still opt in. Expect the same, but confirm in the updated guideline.
  3. Will corporate buyers still demand e-invoices from exempt suppliers? Almost certainly yes — mandated companies need documentation for expenses, and self-billed e-invoices still require your TIN and registration details. Exemption removes your obligation, not their request.

We will update this article when the revised guideline is published.

What to do this week

  • Under RM3M: nothing is required of you. Keep proper numbered invoices (exemption from e-invoicing is not exemption from record-keeping), know your TIN, and have an answer ready for the day a corporate client asks for an e-invoice anyway.
  • RM3–5M: your deadline situation is unchanged — the relaxation period still ends 31 December 2026. Get your MyInvois Client ID + Secret, start collecting buyer TINs now, and test in sandbox before December.
  • RM1–3M, already issuing:don't switch anything off until LHDN confirms the transition rules in writing.

Sources: the Prime Minister's 2026 National Day address (30 August 2026) and LHDN's accompanying statement, as reported by The Star, Business Today and Free Malaysia Today. General information, not tax advice — confirm your position with your tax agent once the updated LHDN guideline is out.