The Inland Revenue Board of Malaysia (HASiL) has announced an increase to the annual income or sales threshold below which taxpayers are exempt from mandatory e-invoice implementation. Effective 1 September 2026, the threshold has been raised from RM1 million to RM3 million, exempting micro, small and medium enterprises (MSMEs) with annual income or sales below that figure from the obligation to issue e-invoices.
Threshold Increase
The revised exemption threshold was announced by the Prime Minister and took effect from 1 September 2026. Under the updated rules, MSMEs with annual income or sales below RM3 million are no longer required to comply with the e-invoice mandate. HASiL estimates that this change exempts more than 1.1 million businesses who would otherwise have fallen within scope.
While compliance is no longer obligatory for this segment of taxpayers, HASiL has encouraged voluntary adoption of e-invoicing among MSMEs, citing the benefits of business digitalization aligned with national economic policy objectives.
Implications for Businesses
Businesses that had been preparing to comply with the e-invoice mandate based on the previous RM1 million threshold should review their annual income or sales figures against the new RM3 million benchmark. Those now falling below the threshold are relieved of the mandatory implementation obligation, though they may still opt in voluntarily.
Businesses already operating above the RM3 million threshold and currently subject to the mandate are not affected by this change and should continue to comply with their existing obligations.
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