IRB: Malaysia exempts businesses below RM500,000 from e-invoicing, delays mandate for RM1m to RM5m group to 2026
KUALA LUMPUR, June 6 — The Inland Revenue Board (LHDN) today announced that the implementation phase for e-invoices for taxpayers with annual income or sales exceeding RM1 million but not exceeding RM5 million has been postponed to Jan 1, 2026.
In a statement here, LHDN also announced that taxpayers with an annual income or sales below RM500,000 are exempted from the implementation of the e-Invoice system.
'The implementation phase for taxpayers with annual income or sales up to RM1 million has been postponed to July 1, 2026,' LHDN said.
The board added that the decision was made after the government recognised the commitments of taxpayers, particularly Micro, Small, and Medium Enterprises (MSMEs), in meeting e-invoice legal requirements, which necessitate adequate preparation time and face numerous implementation challenges.
The statement said that, in line with this decision, a new timeline for the e-invoice implementation phases has been established with Phase 3 targeting taxpayers with annual income or sales exceeding RM5 million but not exceeding RM25 million coming into effect on July 1, 2025.
LHDN noted that Phase 4 will involve taxpayers with annual incomes or sales exceeding RM1 million up to RM5 million and will begin on Jan 1, 2026 while Phase 5 will cover the income group of up to RM1 million and will commence on July 1, 2026.
The previously announced six-month grace period will also apply to these new phases, the agency said.
It stressed that during this period, taxpayers will be permitted to issue consolidated e-invoices for all transactions, including self-billed e-invoices.
Necessary details, it said, can be included in the 'Product or Service Description' field.
'If there is a request for an e-Invoice from the buyer, the seller is also allowed to issue only a consolidated e-Invoice without issuing one for each transaction,' the statement said.
LHDN also said that during this grace period, no prosecution will be initiated under Section 120 of the Income Tax Act 1967 for non-compliance with e-Invoice regulations, provided taxpayers adhere to the consolidated e-Invoice requirements.
'Furthermore, starting Jan 1, 2026, taxpayers involved in e-Invoice implementation must issue an e-Invoice for every sale of goods or provision of services exceeding RM10,000, and consolidated e-Invoicing will no longer be permitted,' the statement added.
For any inquiries regarding the system's implementation, the public may contact LHDN offices, the e-Invoice Help Desk at 03-8682 8000, MyInvois Live Chat, email [email protected], or submit a query through the MyInvois Customer Feedback Form at https://feedback.myinvois.hasil.gov.my. — Bernama
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