The phase timeline (as verified July 2026)
| Revenue band | Phase | Mandatory from |
|---|---|---|
| Above RM100 million | Phase 1 | 1 August 2024 |
| RM25 million – RM100 million | Phase 2 | 1 January 2025 |
| RM5 million – RM25 million | Phase 3 | 1 July 2025 |
| RM1 million – RM5 million | Phase 4 | 1 January 2026 |
| Below RM1 million | Exempt | Currently exempt (threshold raised from RM500,000 to RM1,000,000 effective 1 January 2026) |
Source: LHDN public guidance, cross-checked against multiple current sources — verified July 2026. Relaxation-period end dates for each phase vary between sources; confirm your specific grace period with LHDN.
What changed on 1 January 2026
Two things moved together: the exemption threshold rose from RM500,000 to RM1,000,000 annual turnover, taking many micro-businesses out of scope entirely, while Phase 4 (RM1M–RM5M) came into force — meaning a meaningful band of SMEs crossed into mandatory e-invoicing the same date a different band exited it. If your revenue sits near either boundary, re-check your status rather than assuming last year's classification still applies.
Readiness checklist
- Confirm your exact revenue band and phase date with LHDN or your tax advisor — do not rely solely on this tool.
- Decide your submission method: LHDN's free MyInvois Portal (manual, fine for low volume) vs an API integration into your existing accounting/billing system (needed once volume makes manual submission impractical).
- Audit whether you currently rely on consolidated/batched invoicing — this is restricted above RM10,000 per transaction from 1 January 2026.
- Map your current invoicing software's e-invoicing/MyInvois compatibility, or budget for an integration.
- Train whoever issues invoices on the new validation flow before your mandatory date, not after.
If your existing billing system needs MyInvois integration built in rather than a manual portal workaround, see our custom software service — we integrate e-invoicing into existing flows rather than replatforming your whole system. For the mechanics of the exemption threshold and phase changes in more depth, see e-invoicing automation in Malaysia.