Malaysia raised the e-Invoice exemption threshold from RM1 million to RM3 million with effect from 1 September 2026. That change may give smaller businesses more room, but it doesn’t mean every business below RM3 million is automatically exempt.
The threshold is the first check. Revenue evidence, ownership and related entities still matter.
What changed?
HASiL’s announcement dated 30 August 2026 states that the exemption threshold increased from RM1 million to RM3 million effective 1 September 2026.
The wording is below RM3 million. A business at RM2.9 million may pass the revenue screen. A business at exactly RM3 million does not pass that screen.
Neither number settles the full eligibility question by itself.
Why ownership can change the answer
Section 1.6.10 of the General Guideline, version 4.8 excludes a taxpayer from this exemption where any of these applies:
- a non-individual shareholder, or equivalent, has annual revenue or turnover of at least RM3 million;
- the taxpayer is a subsidiary of a holding company with annual revenue or turnover of at least RM3 million; or
- a related company or joint venture has annual revenue or turnover of at least RM3 million.
These are alternative exclusions. Check whose revenue each condition refers to; a corporate shareholder’s existence alone does not complete the test.
For related companies, the guideline refers to section 2 of the Promotion of Investments Act 1986. The General FAQ, question 103 illustrates ownership and control relationships. Use that assessment rather than treating any shared owner or director as an automatic group connection.
Fictional case studies: similar size, different results
A standalone owner-run business
Assume a standalone Sdn Bhd is wholly owned by individuals. Its annual revenue was RM2.4 million in each of YA2022–YA2025, and it has not reached RM3 million in 2026. It has no holding-company, related-company or joint-venture link caught by the exclusions above, and no earlier history that placed it in a higher mandatory phase. YA means year of assessment.
Result: it qualifies for the current exemption on those facts. The owner saves the financial records and ownership assessment and assigns a person to monitor changes. If the company already implemented under the earlier threshold, it can separately decide whether to discontinue or continue voluntarily under the transition guidance.
A smaller company in a group
Now assume another Sdn Bhd has RM1.2 million of relevant annual revenue and is wholly owned by a holding company with RM8 million of relevant annual revenue.
Result: it does not qualify for this exemption. The holding-company exclusion applies even though the subsidiary’s own revenue is small. Its finance manager keeps the group evidence and checks the applicable implementation date under the company’s actual history.
The lesson is that revenue and ownership answer different parts of the question. The first company has a documented exemption; the second has a documented reason why it fails. Neither conclusion comes from looking at its own sales alone.
Build an exemption evidence file
Keep a short file containing:
- the date the assessment was made;
- the taxpayer and entity type;
- the revenue periods and financial records used;
- the ownership chart and corporate shareholders;
- relevant holding, related-company and joint-venture information;
- the guideline version and paragraphs checked;
- any previous e-Invoice implementation decision; and
- the person who reviewed the conclusion.
Update the file when revenue, ownership or official guidance changes. This is more reliable than keeping only a screenshot of a threshold announcement.
Exemption doesn’t remove your other records
The e-Invoice exemption isn’t an exemption from income tax, bookkeeping or ordinary supporting records. You still need reliable sales, purchase, bank and other business records.
Customers may also ask for particular documents, and your accounting process still needs to capture income, refunds, fees and amounts owed. An exemption decision should therefore change only the relevant e-Invoice process, not weaken the underlying books.
What should you do after the assessment?
If you qualify and haven’t implemented, retain the evidence and monitor revenue and ownership changes.
If you qualify but already use e-Invoice, the current FAQ allows newly eligible businesses to discontinue without a separate application or prior approval, while voluntary continuation remains possible. Use the transition checklist to review corrections, customer needs, software and historical access before choosing.
If you don’t qualify, use the broader applicability process in Does My Business Need to Implement e-Invoice? to identify the correct date and operational steps.
The RM3 million change is meaningful, but the safe conclusion is never simply “our sales are lower, so we’re exempt.” Document the full assessment and keep it current.
Sources checked on 24 September 2026 against HASiL’s 30 August announcement and General Guideline version 4.8. Recheck the current threshold, guideline version and ownership conditions before relying on the conclusion.
Sources referred to in this guide (3)
We’ve taken reasonable steps to verify the cited sources and check this information as at the source-check date. We can’t guarantee 100% accuracy, completeness or that it remains up to date. This is general information and does not replace professional accounting, tax or legal advice tailored to your circumstances. How these guides were prepared.