LHDN Revises E-Invoicing Exemption and Rollout Timeline
The Inland Revenue Board of Malaysia (LHDN) has recently updated the e-invoicing exemption threshold. As of June 2025, businesses with an annual revenue of RM500,000 or less are exempt from implementing the e-invoicing system. This is an increase from the previous threshold of RM150,000.
Key Exemption Criteria
To qualify for the exemption, businesses must meet the following conditions:
- Annual Revenue: Below RM500,000.
- Ownership Structure: No corporate shareholders.
- Affiliations: Not a subsidiary or part of a group of companies.
- Related Entities: No related or associated companies with revenue exceeding RM500,000.
Sole proprietors must consider the combined revenue of all their businesses. If the total exceeds RM500,000, they are required to implement e-invoicing.
Important Implementation Timeline
For businesses with annual revenue between RM1 million and RM5 million, the mandatory e-invoicing implementation has been postponed to 1 January 2026. For those with revenue up to RM1 million, the implementation is deferred to 1 July 2026.
Additional Considerations
Starting 1 January 2026, businesses will be required to issue individual e-invoices for transactions exceeding RM10,000. Consolidated e-invoices will no longer be permitted for such transactions.
Conclusion
The updated e-invoicing exemption threshold in Malaysia allows businesses with annual revenue below RM500,000 to be exempt. Implementation for others is deferred until 2026, with new invoicing requirements starting January 2026.
