Freelancers Are Now Exempt From e-Invoicing Too

Businesses and individuals earning below RM3 million a year no longer need to implement e-Invoicing, the Inland Revenue Board (LHDN) said.

The change follows Prime Minister Datuk Seri Anwar Ibrahim’s announcement at the 2026 National Day address, raising the exemption threshold from RM1 million to RM3 million. LHDN said more than 1.1 million businesses are now exempt.

What This Means For You

The exemption isn’t limited to registered companies. It also covers sole proprietors, freelancers, gig workers and content creators, as long as your annual business revenue stays below RM3 million.

For most people earning income outside a regular job, this means e-Invoicing is now something you can set aside entirely, rather than something to prepare for under the phased rollout schedule.

Exemption Has One Exception

The exemption doesn’t apply if your business has a non-individual shareholder, holding company, or related company or joint venture with annual turnover of RM3 million or more, even if your own revenue is well below that.

If your business sits within a larger corporate group, it’s worth checking your specific structure rather than assuming the exemption applies automatically.

The Threshold Has Doubled Twice

This is the second time the exemption threshold has been raised within about a year. The government first lifted it from RM500,000 to RM1 million in December 2025, effective January 2026, following feedback from SMEs concerned about compliance costs.

Voluntary Participation Still Encouraged

LHDN said MSMEs below the new threshold are still encouraged to implement e-Invoicing voluntarily. Businesses that do can claim a tax deduction of up to RM50,000 per year of assessment for qualifying implementation costs, available from YA2024 through YA2027.

Businesses with questions can reach LHDN through its e-Invoice contacts page.

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