e-Invoice Exemption: Who Qualifies in Malaysia?

By Axecta Management Services, Kuala Lumpur · Last verified: 29 October 2026

Exempt versus not yet required

These two situations are often confused:

• Exempt: the business, or a type of transaction, is excluded from the obligation under the guideline or an official order.
• Not yet required: the business is in scope but its phase start date or relief period has not ended.

The first can be long-lasting but is conditional. The second is temporary. Treating the second as the first is a common cause of surprises. See implementation and transitional relief.

Categories and conditions in official guidance

Exemptions in the guideline have generally fallen into groups such as:

• Businesses below a stated annual turnover or revenue level.
• Certain types of income or persons that the guideline names.
• Specific transaction types for which the guideline allows a simplified or alternative treatment.

For each, the guideline sets conditions. Some depend on a measurement period; some depend on the nature of the transaction. Read the exact wording, not a summary. If you are quoting a rule to a customer or auditor, cite the section.

What exempt businesses still need to keep

Even without e-invoicing:

• Issue proper invoices, receipts and credit notes under normal rules.
• Keep full accounting records and supporting documents.
• Keep a file note recording why you consider the business exempt, the figures used and the date checked.
• Be ready to receive e-invoices from suppliers. Your suppliers may be in scope and may request your TIN and details.

How consolidated or simplified treatment works

For some low-value or consumer transactions, the guideline permits consolidating them into periodic submissions rather than issuing one e-invoice per sale, subject to conditions. This is not an exemption from e-invoicing; it is a permitted method within it. Use it only if your transactions meet the conditions.

How to confirm your position with LHDN

1. Read the current guideline and FAQ on the LHDN site.
2. Calculate your figures using the stated method.
3. If a point is unclear, use LHDN’s enquiry channels and keep the reply.
4. Record the conclusion, the sources and the date in your compliance file.

Your accountant can prepare this file. Axecta does this for clients as part of an e-invoice readiness review.

What changes if your turnover changes

If your revenue grows beyond a stated level, or you start a new activity, your status can change. Re-test the position when you close each financial year, when you register a new entity and after any Budget or LHDN announcement.

What LHDN’s timeline page says

The LHDN timeline states that taxpayers with annual turnover or revenue of less than RM3,000,000 are exempted from e-Invoice implementation. The page was last updated on 30 August 2026. Earlier announcements and some secondary sources refer to other exemption levels, such as RM1 million and RM500,000, which were stated at different times. The point for a business owner is to rely on the current official page and the latest guideline, not on a blog that may be dated.

Practical consequences of being exempt

• You do not have to issue e-invoices yourself, but you should keep a file note showing the revenue test and the date.
• If a customer is in scope, they may ask for your TIN and details so they can issue self-billed documents or record purchases.
• If your revenue passes the threshold, you move into the phase for your size. Plan for that before year-end.
• You can still adopt e-invoicing voluntarily if it helps your customers or your systems.

How to document your position

Write a short memo and keep it with the tax file:

1. Revenue figure and the year used.
2. The LHDN page read, with its “last updated” date.
3. The conclusion (exempt or in scope, and the date).
4. The reviewer and the review date.

Re-do the memo each year. Your accountant can prepare it as part of year-end. See Does my Sdn Bhd need e-Invoicing?.

Frequently asked questions