The RM3 million e-invoice threshold, explained

Since 2024, LHDN has phased in mandatory e-invoicing through its MyInvois system, largest businesses first. The question we hear most from small businesses is simple: "Do I have to?" As of October 2026 the answer turns on one number, RM3 million.

#The rule

Turnover is read from your audited financial statements or tax return for the relevant year of assessment. No application is needed to be exempt; an exempt business simply does not have to issue e-invoices.

#The exception

The exemption does not apply if your business has a non-individual shareholder, a holding company, a related company or a joint venture with turnover of RM3 million or more. A small subsidiary of a large group is in scope even if the subsidiary itself is small.

#Growing past RM3 million

You start e-invoicing on 1 January of the second year after the year of assessment in which you first reach RM3 million. Reach it in 2027, start on 1 January 2029. That gap is there so you can plan: pick software, appoint an intermediary if you want one, and test in LHDN's sandbox before the first real submission.

#Why exempt businesses issue e-invoices anyway

Many of Invoa's customers are below the threshold and e-invoice regardless, for three practical reasons.

1. Their customers ask. A business that must e-invoice wants validated e-invoices from its suppliers to support its own expense claims. If you sell to companies, you will be asked.
2. It costs nothing extra. E-invoicing is included on every Invoa plan, including Free. The work is the same as issuing an invoice: one more click.
3. Starting small is easier. Appointing an intermediary, finding customers' TINs and fixing validation errors are all easier with ten invoices a month than with three hundred.

#What an e-invoice actually involves

• Your details. TIN, SSM registration number (BRN), MSIC code, address, phone, and SST number if registered.
• Your customer's TIN. Invoa looks it up from an IC or registration number. For walk-in sales where nobody asks for an e-invoice, a consolidated e-invoice once a month covers the lot.
• Submission and validation. LHDN validates within seconds and returns a unique identifier and a QR code, which Invoa prints on the PDF.
• Cancellation. Within 72 hours of validation you can cancel. After that, a credit note.

The e-invoicing page has the longer version, and the docs walk through appointing Prigo X as your intermediary in the MyInvois portal.

#Questions

#Do businesses under RM3 million need to issue e-invoices?

No. Under e-Invoice Guideline version 4.8, businesses with annual turnover or revenue below RM3 million are exempt, including from self-billed e-invoices, unless they have a holding company, related company, joint venture or non-individual shareholder with turnover of RM3 million or more.

#Is the RM3 million threshold turnover or profit?

Turnover or revenue, not profit. LHDN reads it from the audited financial statements or the tax return for the relevant year of assessment.

#My company turns over RM2 million but my holding company is larger. Am I exempt?

No. The exemption does not apply when a holding company, related company, joint venture or non-individual shareholder has turnover of RM3 million or more.

#When do I start if I cross RM3 million this year?

On 1 January of the second year after the year of assessment in which you first reach RM3 million. Reach it in 2026, start on 1 January 2028.

#Can an exempt business still issue e-invoices?

Yes. Many do because their customers ask for validated e-invoices. There is no application and no penalty for issuing them voluntarily.