LHDN e-invoice for small F&B, salon and retail businesses: the 2026 guide

Who must issue e-invoices

Phases are based on annual turnover (generally your YA2022 figures). All four phases have now started.

The RM3 million exemption

• From 1 September 2026, businesses with annual turnover below RM3 million do not need to issue e-invoices (the threshold was RM1 million before that).
• No application to LHDN is needed. You may still issue e-invoices voluntarily.
• The exemption does not apply if a company shareholder, holding company, related company or joint-venture partner has turnover of RM3 million or more.
• Once your turnover reaches RM3 million, the exemption is not restored if it later falls below.
• If you first reach RM3 million in a later year of assessment, you start on 1 January of the second year after it (for example, reaching RM3 million in YA2026 means starting on 1 January 2028).

The relaxation period until 31 December 2027

For Phase 4 businesses, LHDN gives a relaxation period until 31 December 2027. During it you may issue consolidated e-invoices for all transactions, including ones above RM10,000 and ones where the buyer asked for an e-invoice, and use free-text product descriptions. LHDN will not prosecute under section 120 during this period, provided consolidated e-invoices are still submitted every month.

Walk-in (B2C) sales: receipts and the monthly consolidated e-invoice

• If the customer does not ask for an e-invoice, give a normal receipt.
• Group those sales into one consolidated e-invoice and submit it within 7 calendar days after the end of the month.
• The consolidated e-invoice uses the buyer name "General Public" and the general TIN EI00000000010.
• F&B, beauty and general retail are not on LHDN's list of activities that may not use consolidated e-invoices.
• Outside the relaxation period, any single transaction above RM10,000 needs its own e-invoice, in every industry.

When a customer asks for their own e-invoice

The customer should ask at the time of purchase and give you:

• Full name as in their MyKad or passport.
• Their tax identification number (TIN), or MyKad / MyTentera / MyPR / MyKAS number, or both.
• Residential address and contact number.
• SST registration number, or "NA".

Fixing mistakes

• A validated e-invoice can be cancelled within 72 hours.
• After 72 hours, issue a credit note or debit note instead.

Penalties

Failing to issue an e-invoice can lead to a fine of RM200 to RM20,000, up to 6 months in jail, or both, for each offence under section 120(1)(d) of the Income Tax Act 1967.

A simple monthly routine

1. Check whether your business (and any related company) is above the RM3 million threshold.
2. Issue individual e-invoices on request during the month.
3. After month end, review that every sale not individually e-invoiced is in the consolidated e-invoice.
4. Submit the consolidated e-invoice within 7 days.
5. Keep receipts and records for audit.

How KEDAI handles this

In KEDAI, customers claim their own LHDN e-invoice from their order, and orders that are not claimed roll into the monthly consolidated submission automatically. SST and service charge are applied per order type on every bill, at the counter, online and through table QR.

Sources

• LHDN e-Invoice General FAQ (updated 4 Sep 2026)
• LHDN e-Invoice Specific Guideline v4.9 (published 7 Sep 2026)
• LHDN e-invoice implementation timeline (updated 30 Aug 2026)
• The Star: higher e-invoicing threshold (30 Aug 2026)