Is a small business exempt from e-Invoicing in Malaysia, and below what turnover?
Yes. Under LHDN's current guideline (v4.8, 30 August 2026), taxpayers with annual turnover or revenue below RM3 million are exempt. The exemption is lost if the taxpayer has a non-individual shareholder, holding company, or related company or joint venture with RM3 million or more.
LHDN exempts the smallest businesses from mandatory e-invoicing, but the cut-off has moved.
Current rule: LHDN's implementation timeline page and General Guideline v4.8 (section 1.6.1(e)) say taxpayers with annual turnover or revenue below RM3,000,000 are exempt.
Earlier figures: RM150,000 originally, then RM500,000 (announced June 2025), and the guideline history includes an interim level of RM1 million. The RM3 million figure is what LHDN's site shows now.
Group carve-out (section 1.6.10): the exemption does not apply where the taxpayer:
- has a non-individual shareholder with turnover of RM3 million or more,
- is a subsidiary of a holding company with RM3 million or more, or
- has a related company or joint venture with RM3 million or more.
Opting in: an exempt business can choose to start e-invoicing earlier, regardless of turnover.
If you grow past the threshold: the guideline sets the start date by reference to when your turnover reaches RM3 million, so track it each year.
Even if exempt, customers who must use e-invoices may ask for your TIN and details.
Legal basis
- LHDN e-Invoice General Guideline v4.8, s.1.6.1(e) and s.1.6.10
Sources
Applies to 2026 · Last reviewed 29 October 2026
General information for business owners, not legal, tax or professional advice. Rules change, so check the sources or ask a licensed professional before you act.
Related questions
- What is the corporate tax rate for a small company in Malaysia?A Malaysian resident company normally pays 24% income tax. A company that meets the SME conditions pays 15% on the first RM150,000 of chargeable income, 17% on the next RM450,000 (up to RM600,000), and 24% on anything above that.
- What conditions must my company meet to get the SME tax rates in Malaysia?To use the lower 15%/17% rates, the company must be resident, have ordinary paid-up capital of RM2.5 million or less, and gross business income of RM50 million or less. It must also pass the related-company test and, from YA 2024, a foreign-ownership test.
- Can a company with foreign shareholders still get the SME tax rate in Malaysia?Only if foreign ownership stays at 20% or below. The SME rates also need paid-up ordinary capital of RM2.5 million or less and gross business income of RM50 million or less. If more than 20% of the ordinary capital is held, directly or indirectly, by foreign companies or non-citizen individuals at the start of the basis period, all income is taxed at 24%.
- Does a dormant company with no income still have to file a tax return in Malaysia?Yes. LHDN says companies that are dormant or have not started business must still register a tax file and file returns. A nil return tells LHDN there is no taxable income, and failing to file can be an offence even when no tax is due.
- What is the Year of Assessment and how does it relate to my financial year?The Year of Assessment (YA) is the calendar year in which your company's accounting year (the basis period) ends. A company with a financial year ending 30 June 2025 reports that income in YA 2025.