Malaysia e-Invoice 2026: Complete Guide for SMEs (RM1M–RM5M)
2026-06-10
Many SME owners still aren't sure: when does e-Invoice apply to me, what do I need to do, and what happens if I don't? This guide answers all three.
When am I required to start?
LHDN mandates e-Invoice in phases based on annual turnover:
| Annual turnover | Mandatory date |
|---|---|
| Above RM100 million | 1 August 2024 (live) |
| RM25M – RM100M | 1 January 2025 (live) |
| RM5M – RM25M | 1 July 2025 (live) |
| RM1M – RM5M | 1 January 2026 |
Your phase is determined by turnover in the FY2022 audited financial statements (or the 2022 tax return if unaudited).
Below RM1 million: exempt for now
If your annual turnover is below RM1 million, you are currently exempt. Two caveats:
- Once turnover exceeds RM1 million in any year, e-Invoice becomes mandatory from 1 January of the second following year.
- Even while exempt, customers who are already on e-Invoice may ask you for details so they can issue self-billed e-Invoices.
The 6-month relaxation period
Each phase comes with a 6-month relaxation period. For Phase 4 (RM1M–RM5M) it runs until 30 June 2026. During relaxation:
- Consolidated e-Invoices are allowed for all transactions, including self-billed
- No requirement to issue per-transaction invoices
- No prosecution under s.120 for non-compliance
After the relaxation period, normal rules apply in full.
The RM10,000 rule
Once your relaxation period ends, transactions above RM10,000 cannot be consolidated — each must have its own e-Invoice. This hits wholesalers, building material suppliers and contractors hardest.
Penalties for non-compliance
Failure to issue e-Invoices is an offence: a fine of RM200 to RM20,000 or imprisonment up to 6 months, or both — per offence, not a one-off.
What to do now
- Confirm your mandatory date using FY2022 turnover
- Choose your method: the free MyInvois Portal (fine for low volume) or accounting software with API integration
- Collect buyer details: e-Invoices need the buyer's TIN, registration number and address — start cleaning up your customer database now
- Train your billing staff: the relaxation period is for practising, not procrastinating
Not sure which phase you're in? Use our e-Invoice compliance checker — enter your turnover and get the answer in 30 seconds.