RM3 Million E-Invoicing Threshold: What It Means For AutoCount User (Updated with LHDN’s Latest FAQ)

Effective 1 September 2026, the government raised the e-Invoicing exemption threshold for MSMEs from RM1 million to RM3 million. LHDN has since released a new FAQ that answers the one question everyone was asking: what happens to businesses that already started issuing e-Invoices before the threshold went up? Here’s the full picture, updated with that guidance.

What Changed

Businesses with annual income or sales under RM3 million are no longer required to implement e-Invoicing — a change announced by the Prime Minister and expected to benefit over 1.1 million businesses. LHDN says the move eases the compliance burden on MSMEs, though it continues to encourage voluntary participation as part of the country’s digitalisation push.

Implementation Timelines to Note

• Statutory bodies, statutory authorities, local authorities and international organisations: mandatory from 1 July 2025.
• New businesses/operations (2023–2025) with turnover of at least RM3,000,000: implementation date is 1 July 2026.
• New businesses/operations from 2026 onwards: implementation date is 1 July 2026 or the commencement date. If first-year turnover is expected below RM3,000,000, this is deferred to 1 January in the second year after turnover reaches RM3,000,000.

Who’s Exempt — and Who Isn’t

The RM3,000,000 exemption (Section 1.6.10 of the e-Invoice Guideline) applies to all taxpayer types — individuals, partnerships, companies, co-operatives. It does not apply if:

1. You have a non-individual shareholder with turnover ≥RM3,000,000; or
2. You’re a subsidiary of a holding company with turnover ≥RM3,000,000; or
3. You have a related company* or joint venture with turnover ≥RM3,000,000.

*”Related company” per Section 2 of the Promotion of Investments Act 1986.

If You’re Already on e-Invoice System

If you’re an AutoCount Accounting user who was mandated from 1 July 2026 and has already onboarded:

• If eligible for the exemption: Decide whether to switch off or continue. With LHDN’s confirmation, exempt businesses can discontinue immediately without applying — no need to wait for further clarification. If you’d rather keep going voluntarily, AutoCount’s integration can simply stay on.
• If not eligible: Check for past gaps in your submissions? Read our guide on the e-Invoice Special Voluntary Disclosure Programme (SVDP).

If You Haven’t Started Yet

Good news for most, but don’t assume you’re permanently off the hook, and don’t wait until the last minute either.

1. Verify true exemption — check your turnover and the exclusion criteria (non-individual shareholders, holding companies, related companies) before assuming you’re covered.
2. Watch your growth. Crossing RM3 million triggers an implementation date of 1 January in the second year after the YA the threshold was crossed — mark your calendar once you know your numbers.
3. Consider going voluntary early — many B2B buyers already expect a validated e-Invoice for their own tax claims.
4. Upgrade your e-Invoicing setup ahead of time. AutoCount Accounting offers direct MyInvois submission, validation, and status tracking within the accounting module itself — avoiding the double handling that comes from bolting e-Invoicing onto a separate system later.

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Frequently Asked Questions

My business already existed before YA2022 and my revenue stayed under RM3 million that year — what’s my implementation date? If you meet the exemption criteria, your official date is still 1 July 2026, but you’re exempt from actually implementing. You only need to start once your revenue reaches RM3 million — from 1 July 2026 if that happens in YA2023–2025, or from 1 January in the second year after the YA it happens if that’s YA2026 onwards. If you don’t meet the exemption criteria, you must implement from 1 July 2026 regardless of how low your revenue is.

My business started between YA2023 and YA2025 — how do I work out my date? If your revenue reached RM3 million in any of those years, implement from 1 July 2026. If it stayed under RM3 million and you meet the exemption criteria, you’re exempt (with 1 July 2026 as your notional date) until revenue crosses RM3 million from YA2026 onwards, at which point you implement from 1 January in the second year after that YA. If your revenue stayed low but you don’t meet the exemption criteria — for example, you’re a subsidiary of a company that has already implemented e-Invoice — you must still implement from 1 July 2026.

My business only started from YA2026 onwards — what applies to me? If you don’t meet the exemption criteria, implement from 1 July 2026 or your commencement date, whichever is later. If you do meet the criteria, you’re exempt for as long as your revenue for that first YA stays under RM3 million. Once revenue in any YA reaches RM3 million, you implement from 1 January in the second year following that YA. (Two businesses starting the same day can end up on very different timelines — one earning RM3.12 million in its first year would implement two years later, while one earning RM308,000 stays exempt until it eventually crosses the threshold.)

I was supposed to implement e-Invoice, but I never got around to it — and I now qualify for the exemption. Will I be penalised for not issuing e-Invoices in the meantime? No. If your revenue is under RM3 million and you meet the exemption criteria, you’re treated as exempt from your original implementation date onward — even if you didn’t issue a single e-Invoice since that date. No compliance action or penalty applies.

I’ve already been issuing e-Invoices, but I now qualify for the exemption. Do I need to apply to LHDN to stop? No separate application or prior approval is needed. If you meet the exemption criteria, you can discontinue issuing e-Invoices immediately. You’re also free to keep issuing them voluntarily if you’d prefer.

I found gaps in my past e-Invoice submissions, and I now qualify for the exemption — do I need to go through the SVDP for those omissions? No. If you now meet the exemption criteria, you’re not required to participate in the e-Invoice Special Voluntary Disclosure Programme (SVDP) for those omissions, and you can simply stop issuing e-Invoices going forward.

Can I keep issuing e-Invoices even though I’m exempt? What happens if my revenue grows again later? Yes — voluntary participation is welcomed and encouraged as part of the Government’s digitalisation push. But the exemption isn’t permanent: if your turnover later reaches or exceeds RM3 million, you’ll be required to implement e-Invoice again, starting 1 January in the second year following the YA in which you crossed the threshold.