Malaysia's e-Invoice in Plain Terms: Who Must Issue One in 2026, Who Is Exempt, and the FY2022 Rule Nobody Mentions
The last phase of Malaysia's e-Invoice rollout started on 1 January 2026, and it caught the smallest businesses — turnover up to RM5 million. Two things about it are widely misunderstood. First, the phase you are in was fixed by your FY2022 numbers and does not move: LHDN determines it from your audited accounts for financial year 2022, or your tax return for year of assessment 2022 if you have none, and states in its own guideline that changes to turnover in later years do not change your obligation. Second, there is a floor. Taxpayers with annual turnover or revenue of less than RM1,000,000 are exempted outright — but the exemption only covers issuing. Anyone selling to you still has to issue an e-Invoice, and any company you own still has to comply on its own timeline.
