The e-Invoice exemption threshold for small businesses has been raised from RM1 million to RM3 million in annual turnover or revenue. This follows the Prime Minister's earlier announcement and has now been reflected in LHDN's official e-Invoice Frequently Asked Questions.

The change matters most to a specific group. Some businesses had turnover below RM1 million and were already exempt. Others crossed RM1 million but stayed under RM3 million, and had already started issuing e-Invoices to meet the earlier requirement. LHDN's latest update focuses on this second group.

For a business that already implemented e-Invoice under the old RM1 million threshold but qualifies for exemption under the new RM3 million threshold, no penalty applies for having issued e-Invoices earlier, and none applies for choosing to stop. No application or prior approval from LHDN is needed to discontinue. The business may stop issuing e-Invoices immediately, or continue doing so voluntarily in support of the government's digitalisation initiative.

The same treatment applies to a business that had not started issuing e-Invoices at all. If its turnover stayed below RM3 million throughout the relevant years and it meets the other exemption conditions, no compliance action or penalty will be imposed, even where the earlier implementation date had technically already passed.

One point worth noting. Once a business eventually crosses RM3 million and is formally required to implement e-Invoice, that requirement becomes permanent. No exemption is restored later even if turnover falls back below RM3 million in a subsequent year.

If you wish to focus on running and growing your business, our CFO advisory team can take care of your accounting, payroll, tax planning, e-stamping, corporate secretarial and compliance matters for you. Feel free to WhatsApp us at 010-246 2151.