Upcoming e-Invoice Malaysia Changes in 2026 That Businesses Must Pay Attention To

Update as of 5 January 2026:

LHDN has announced that the interim relaxation (grace) period for Group 4 taxpayers will be extended until 31 December 2026. During this extended relaxation period, enforcement actions will not be imposed, provided that businesses are taking steps to prepare for compliance.

This extension is intended to give affected businesses additional time to stabilise their systems, refine internal workflows, and complete necessary adjustments before full enforcement begins.

Businesses are encouraged to use this extended relaxation period to ensure their invoicing processes and systems are fully aligned with e-Invoice requirements ahead of the enforcement phase.

Malaysia’s e-invoice framework continues to evolve as the government refines implementation timelines and requirements. While many businesses are already preparing for their implementation, 2026 brings several new rules that companies should take note of, especially those dealing with high-value sales, utilities, telecommunications, and businesses below the RM1 million annual revenue threshold.

This article highlights the main updates taking effect in 2026, what they mean for your business, and how you can prepare.

1. New RM1 Million Revenue Exemption: Relief for Micro and Small Businesses

The government has announced an important update. The e-invoice exemption threshold has been raised to RM1 million in annual revenue.

This means:

• Businesses with annual revenue below RM1 million are exempt from mandatory e-invoice implementation for now.
• Around 200,000 additional micro and small businesses are expected to fall under this exemption.
• The exemption helps reduce the burden for smaller enterprises, especially those without digital accounting systems.

Although exempt, small businesses may still consider preparing for voluntary adoption to improve recordkeeping and stay ready for future requirements.

2. No More Consolidated e-Invoices for High-Value Transactions

Starting 1 January 2026, taxpayers across all industries can no longer issue consolidated e-invoices for any single transaction above RM10,000.

This means:

• Every transaction exceeding RM10,000 must be issued as an individual e-invoice.
• You cannot combine or consolidate these high-value receipts into a consolidated e-invoice.
• Businesses are expected to collect sufficient buyer details at the point of sale.

This is one of the most important operational changes for 2026 and may require businesses to adjust their checkout processes.

3. New Industries Required to Issue Per-Transaction e-Invoices

Effective 1 January 2026, two major industries will no longer be allowed to issue consolidated e-invoices. These industries must issue an e-invoice for every individual transaction, regardless of value.

a. Electricity Providers

• Applies to electricity distribution, supply, and sales
• Each electricity bill must be issued as an individual e-invoice
• Consolidated billing is no longer permitted

b. Telecommunication Providers

• Applies to postpaid mobile plans
• Internet and broadband subscriptions
• Sales of telecommunication devices and equipment

This change brings greater transparency to recurring charges and device sales, ensuring every transaction moves through the e-invoice validation process.

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4. New Taxpayer Group Beginning e-Invoice Submission in 2026

Businesses with annual revenue up to RM5 million  are scheduled to begin e-invoice implementation starting 1 January 2026

This group covers a large segment of Malaysia’s SME sector, including retail shops, service providers, distributors, and small chains.

Interim Grace Period

Based on the latest LHDN guidance, Group 4 taxpayers are granted an interim grace period of up to one year, ending on 31 December 2026.

This means:

• Businesses should begin their adoption efforts starting from 1 January 2026.
• Full enforcement starts after the grace period.
• Companies are expected to progressively adjust their workflows, systems, and documentation during this time.

SMEs in this category should use 2025 and 2026 to finalize their e-invoice setup and train their teams to avoid last-minute disruptions.

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Conclusion

Malaysia’s e-invoice rollout continues to expand, and 2026 marks an important step with new rules affecting high-value transactions, utilities, telco providers, and mid-sized SMEs. At the same time, the revised RM1 million exemption threshold offers relief to smaller businesses.

Whether your business is preparing for mandatory adoption or adapting to new transaction-level rules, now is the best time to:

• Review your invoicing and billing workflows.
• Ensure your systems are ready for per-transaction e-invoicing.
• Train your team on new requirements.
• Work with an approved e-invoice middleware provider for smooth compliance.

By preparing ahead, your business can transition confidently into 2026 and operate efficiently in Malaysia’s evolving digital tax environment.

To stay up to date on the latest requirements, businesses are encouraged to refer to the updated e-Invoice guidelines published on the LHDN website.

For more information about Goldsoft e-invoice Ready ERP/ e-invoice middleware, please do not hesitate to contact Goldsoft's sales team at 03-2732 8833 or fill up the form below for enquiry.