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30 August 2026

The e-Invoice Relaxation Period Ends 31 December 2026 — SME Checklist

Updated 31 Aug 2026: the exemption threshold was raised to RM3 million effective 1 September, so this checklist now applies to the RM3–5 million band. If that is you, the grace window closes soon. Here is exactly what changes on 1 January 2027 and how to be ready without buying full accounting software.

Who this affects

Businesses with annual turnover between RM3 million and RM5 million (the band was RM1–5M until the exemption threshold was raised to RM3M effective 1 September 2026) came under the e-invoice mandate on 1 January 2026. LHDN granted this phase a relaxation (grace) period running until 31 December 2026. During relaxation, you may issue consolidated e-invoices for all transactions and no penalties are applied for non-compliance with full requirements.

That window closes on 31 December 2026.

What changes on 1 January 2027

  • Buyers can demand a individual validated e-invoice for their purchase — and B2B customers who need proof of expense will.
  • Issuing invoices outside the MyInvois system where an e-invoice is required exposes you to penalties under Section 120 of the Income Tax Act 1967(fines and/or imprisonment per offence, per LHDN's guidelines).
  • Consolidated e-invoices remain allowed only for the specific transaction types LHDN permits — not as a blanket substitute anymore.

The checklist (in order)

  1. Confirm your band. Turnover is based on your FY2022 audited financial statements (or 2022 tax return). RM3–5M ⇒ you are in this phase; below RM3M ⇒ you are now exempt.
  2. Get your MyInvois credentials. Log in to the MyInvois portal with your company TIN, register an ERP/intermediary, and generate a Client ID + Client Secret.
  3. Collect buyer details before December.A valid e-invoice needs the buyer's TIN, registration number (BRN/NRIC), address and contact — start asking your regular B2B customers now, not on 2 January.
  4. Decide your issuing tool. Options: key every invoice manually into the MyInvois portal (free, but slow and error-prone at volume), a full accounting suite (RM100–300/month, weeks of setup), or a lightweight invoicing tool that submits via the API for you.
  5. Test in sandbox first. LHDN provides a sandbox environment — validate a handful of invoices end-to-end before switching to production.
  6. Fix your document flow. After validation, share the invoice with the QR code embedded — your buyer scans it to verify against MyInvois.

Common mistakes we see

  • Waiting for a "final" extension — this phase has already had one, and the Sept 2026 threshold change did not move the 31 Dec date; plan on the published date.
  • Assuming exemption because a related company is under RM3M — the threshold applies per taxpayer entity.
  • Leaving TIN collection to invoice day — chasing a buyer's TIN after delivery is where payments stall.

This article is general information, not tax advice. Requirements are set by LHDN's e-Invoice Guideline (latest version) — confirm specifics for your situation with your tax agent.