LHDN E-Invoice Guide: MyInvois Phases and Exemption

Quick answer: LHDN e-invoicing requires in-scope Malaysian businesses to submit invoices to the MyInvois system for validation, receiving a unique ID and QR code for each one. It was phased in by turnover from August 2024 to January 2026. Since LHDN's guideline update of 30 August 2026, businesses with annual revenue under RM3 million are exempt, and the relaxation period runs to 31 December 2027.

The LHDN e-invoice rules have changed more often than almost any other mandate, with the exemption threshold raised from RM150,000 to RM500,000, then RM1 million, then RM3 million in under two years. If you run a Malaysian business, this guide sets out where things stand in October 2026, how MyInvois works, what a consolidated e-invoice is, and what exempt businesses can keep doing with an ordinary invoice from our free invoice generator.

Important: This is general information, not tax or legal advice. LHDN (Inland Revenue Board of Malaysia, IRBM) updates its General and Specific e-Invoice Guidelines frequently. Check the latest version on the LHDN e-invoice pages or ask a Malaysian tax agent before relying on any threshold or date here.

LHDN e-invoice implementation phases

LHDN brought businesses in by annual turnover or revenue, based on their audited financial statements or tax return for the 2022 year of assessment.

Phase	Annual turnover or revenue	Mandatory from
Phase 1	Above RM100 million	1 August 2024
Phase 2	Above RM25 million up to RM100 million	1 January 2025
Phase 3	Above RM5 million up to RM25 million	1 July 2025
Phase 4	From RM3 million up to RM5 million (after the latest exemption change)	1 January 2026
Exempt	Below RM3 million	Not required (voluntary)

Earlier schedules included a fifth phase for the smallest businesses from July 2026. That phase no longer exists in practice, because the businesses it would have covered were exempted first by the RM1 million threshold from January 2026 and then by the RM3 million threshold announced on 30 August 2026.

New businesses

Businesses that start operating in 2026 or later follow special rules in the guideline. In broad terms, a new business with first-year revenue below RM3 million only needs to start e-invoicing from 1 January of the second year after its revenue first reaches RM3 million. Once your implementation date is set, later changes in turnover do not change it, so you cannot drop out by having a weaker year.

The RM3 million exemption: conditions

The exemption is for taxpayers with annual turnover or revenue of less than RM3 million. It does not apply if any of these has revenue of RM3 million or more:

• A non-individual shareholder of the business
• A holding company of the business
• A related company or joint venture partner

LHDN's FAQs also say that businesses with revenue between RM1 million and RM3 million that had already started e-invoicing may stop or continue voluntarily, and that businesses which never started and are now exempt will not face compliance action for the past period. If you are close to the threshold, keep your revenue figures and group structure documented.

How MyInvois works

1. Create the invoice data in your system, with the required fields (around 55 data fields in the guideline, though not all apply to every transaction).
2. Submit to MyInvois through the free MyInvois Portal or the API from your accounting or ERP system.
3. Validation: LHDN checks the data and returns a unique identifier number and a validation link, usually in seconds.
4. Share with the buyer: you send the validated e-invoice, with its QR code, to your customer.
5. Rejection or cancellation window: the buyer can request rejection, and the supplier can cancel, within 72 hours of validation. After that, corrections need a credit note, debit note or refund note e-invoice.

Malaysia also has a Peppol authority and allows Peppol-based exchange between businesses; our explainer on what Peppol is covers how that network works. The MyInvois validation step is still required for in-scope taxpayers.

Required data at a glance

Key fields include supplier and buyer names, Tax Identification Numbers (TIN), registration or identification numbers, SST registration number where relevant, addresses and contact details, e-invoice number, date and time, classification code, description, quantity, unit price, tax type, rate and amount, and totals. Our guide to the tax ID on an invoice explains how TINs fit alongside other countries' tax numbers.

The relaxation period

Each phase was given a relaxation period, originally six months, during which LHDN said it would not take penalty action for certain shortfalls as long as businesses met conditions. The main concessions have been:

• Allowing consolidated e-invoices for all transactions, including those with buyers who asked for an individual e-invoice
• Allowing a simpler description field on consolidated e-invoices
• Accepting "Not applicable" in some buyer fields
• Allowing self-billed e-invoices to be consolidated in certain cases

The latest guidance gives a relaxation period ending 31 December 2027 for businesses up to RM5 million, with penalty enforcement from 1 January 2028. Larger businesses' relaxation periods have already ended, so they should already be issuing individual e-invoices where buyers request them.

Consolidated e-invoices explained

Retailers and other B2C businesses often sell to customers who never ask for an e-invoice. For those sales, you can give a normal receipt and then issue a single consolidated e-invoice summarising them, submitted to MyInvois within seven calendar days after the end of the month.

Worked example: a café's monthly consolidated e-invoice

A Penang café in Phase 4 issued ordinary receipts to walk-in customers in September 2026. One corporate customer asked for an individual e-invoice for a catering order, which was issued separately.

Item	Receipt range	Amount (RM)
Dine-in sales	R-26090001 to R-26092214	118,450.00
Takeaway sales	R-26092215 to R-26093180	36,720.00
Less: catering order (issued as individual e-invoice)	R-26091500	−4,800.00
Consolidated e-invoice total, September 2026		150,370.00

The maths: 118,450 + 36,720 − 4,800 = RM150,370. The catering receipt falls inside the dine-in range, so it is taken out to avoid counting it twice. The consolidated e-invoice must be submitted by 7 October 2026. If the café is registered for SST, the tax treatment goes on the e-invoice too; service tax rules for food and beverage depend on the outlet and should be checked with a tax agent.

Some activities cannot use consolidation at all, and the guidelines list them (for example certain sales of vehicles and some transactions in specific industries). Check the Specific Guideline for your sector.

Self-billed e-invoices

In some situations the buyer, not the supplier, must issue the e-invoice. This is called a self-billed e-invoice, and the guidelines list when it applies. Common cases include payments to agents, dealers and distributors (such as commissions), purchases from individuals who are not conducting a business, imports of goods and services, payments to foreign suppliers, profit distributions such as dividends in certain cases, and some e-commerce and betting transactions.

For exempt small businesses this matters in a practical way. If you sell to a large customer that must self-bill, the customer may create the e-invoice in MyInvois using your details, so make sure it has your correct name, TIN and registration number. For in-scope buyers importing services, for example paying an overseas software subscription, the self-billed e-invoice is usually issued by the end of the month after the month in which the import or payment happens. Check the Specific Guideline for the exact rule for each transaction type, because the timing differs.

What exempt businesses should do

If your revenue is under RM3 million and none of the group conditions applies, you can keep issuing ordinary invoices and receipts. A tidy PDF is fine. Our generator is free, runs in your browser, stores drafts in local storage and exports a PDF, which suits exempt freelancers and small firms. It does not submit to MyInvois or produce a validated e-invoice.

Two things to watch:

• Your buyers may be in scope. Larger customers may need your TIN and registration details to be correct, and in some cases they issue self-billed e-invoices on your behalf.
• Growth. If revenue rises above RM3 million, plan your switch early. Software and data clean-up take time.

If you are exempt, the Emerald invoice template or the plainer Minimal template produce a clean invoice in minutes. Keep copies: Malaysian tax law requires records to be kept for seven years, and our guide on how long to keep invoices covers other countries.

Penalties

Failing to issue an e-invoice when required can be treated as an offence under the Income Tax Act 1967, with fines per offence and, in serious cases, imprisonment. LHDN has stated that during the relaxation period it will not penalise businesses that meet its conditions. The safest course is to treat the relaxation period as time to fix your systems, not as a reason to wait.

Next step

Pull your revenue for the relevant year, check your group's revenue too, and compare it with the RM3 million threshold in the latest guideline. If you are in scope, test MyInvois submissions now so you are ready when the relaxation period ends. To see how Malaysia compares with India's IRN system, read our guide to the GST e-invoice limit, or the global e-invoicing guide.