Malaysia Doubles E-Invoicing Exemption Threshold to RM1 Million
The Inland Revenue Board of Malaysia (IRBM) has officially raised the mandatory e-invoicing exemption threshold from RM500,000 to RM1 million in annual turnover. Confirmed in the latest e-Invoice Guideline update, this policy change effectively removes the compliance requirement for the smallest tier of Micro, Small, and Medium Enterprises (MSMEs).
This adjustment cancels the previously scheduled "Phase 5" rollout for July 1, 2026, which targeted businesses below the original RM500,000 threshold.
Key Policy Changes
- New Threshold: Businesses with an annual turnover or revenue of RM1 million or less are now exempt from issuing e-invoices.
- Reduced Compliance Burden: This move is designed to provide relief to micro-businesses, allowing them to focus on operations without the immediate pressure of digital tax compliance.
- Status of Larger Firms: The implementation timeline for larger taxpayers remains unchanged. Companies with revenue exceeding RM1 million must still adhere to their respective rollout phases (Phase 3 begins July 1, 2025, for revenues >RM5 million; Phase 4 begins January 1, 2026, for revenues >RM1 million).
- Interim Relaxation: The six-month "relaxation period" for each phase, where consolidated e-invoices are permitted without penalty, remains in effect for eligible taxpayers.
Business Impact
While the increased threshold offers immediate relief for smaller entities, the digital direction of Malaysia's tax system is clear. Exempt businesses should view this as a deferral rather than a permanent opt-out, especially if they plan to scale.
By implementing a robust e-invoicing workflow now with the help of a partner like Comarch, you avoid the growing pains of later compliance and signal digital maturity to your supply chain partners.
There’s more you should know about e-invoicing in Malaysia – learn more about the new and upcoming regulations.
