LHDN e-Invoicing: What Should Small Businesses Do Now?
From 1 January 2026, businesses with annual sales below RM1 million are exempt from e-Invoicing, subject to several conditions. This is what it means for small business, in simple language.
Good news first: from 1 January 2026, businesses with annual sales below RM1 million are exempt from the obligation to issue e-Invoices. This threshold was raised from RM500,000 after the government's announcement in December 2025. But this exemption has conditions, and there is a reason why some small businesses should be ready too. Want a quick answer to your case? Use our free obligation check e-Invois.
Important note: e-Invoicing rules are still changing from time to time. This article is accurate as of August 2026; for business results, verify with the LHDN MyInvois portal or your accountant.
Who is excluded?
Businesses with annual sales or revenue below RM1 million, generally. But this exemption is not automatic for everyone. You are NOT eligible to be exempted, even if the sales are below RM1 million, if your business has a shareholder in a company with sales of RM1 million or more, or you are a subsidiary or related company to a company with sales of RM1 million or more. Businesses in this category need to start e-Invoicing from 1 July 2026.
If my sales are between RM1 million and RM5 million?
The obligation starts on January 1, 2026, with a grace period until December 31, 2026. During the grace period, there is flexibility such as combined e-Invoicing, but after that full enforcement. If you are in this group and haven't started yet, now is the time to organize your invoicing process.
What exactly is this e-Invoice?
In short: your invoice needs to be sent to the LHDN system (MyInvois) for verification in digital format, not just a PDF sent to the customer. The LHDN provides a free MyInvois portal for manual use. For businesses with a lot of invoices, manual entry of each invoice quickly becomes a burden, and that's where a structured invoicing system starts to pay off.
I am excluded. Why should you care?
Three practical reasons. First, your corporate customers may request e-Invoicing for their tax claims, and the business that can provide it will win the job. Second, if your business grows past RM1 million, obligations come, and businesses with established sales records will move easily. Thirdly, neat invoice records benefit you personally: you see who hasn't paid, follow-up can be automated, and year-end accounts are a day's work, not a week.
What should be done now, according to size?
Under RM1 million and not related to a large company: no obligation. But start with an organized sales record, whether it's a simple invoicing system or a consistent spreadsheet. If your invoices are still handwritten or cluttered in WhatsApp, invoicing system from RM800 solves daily problems thus preparing you for the future.
RM1 million to RM5 million: you have been in scope since January 2026. Use the grace period until the end of 2026 to organize the process, don't wait for December.
e-Invois using the free MyInvois portal, isn't that enough?
For a small number of invoices, it is enough. When invoices are already tens of months old, manual entry becomes the work of one staff. At that time a system that sent directly to MyInvois made more sense.
Do retail receipts have to be e-invoiced?
For retail sales to regular consumers, there is an integrated e-Invoicing mechanism that streamlines the process. Details according to the type of business; verify with current LHDN guidelines.
Digitalize Plus can you help me with this?
We build an invoicing system and organized sales records for small businesses, from RM800 depending on the scope. For tax advice, that's your accountant's job; for the system that makes the records exist and tidy, that our work.