Careful.
This sentence may cost SME boss money.

Recently, many bosses tell me the same thing.
“Mr Koh, my company turnover below RM1 million. So e-Invoice no need lah.”

I ask one simple question.
“Your company is owned by who?”

Then the room becomes quiet.
Because e-Invoice exemption is not only about your revenue.
It is also about your company structure.

Many SME bosses only remember the headline.
From 1 January 2026, the e-Invoice exemption threshold increased from RM500,000 to RM1 million.

Sounds good.
Many small businesses feel relieved.
But the trap is this.
Below RM1 million does not automatically mean you are out.

To be exempt, your business must also be genuinely independent.
In simple English, LHDN is not only asking:
“How much you earn?”

LHDN is also asking:
“Who owns you?”
“Who is above you?”
“Who is related to you?”

Example.
You have one small Sdn Bhd.
Revenue only RM400,000.
You feel very safe.
But this company is 100% owned by a holding company.

That holding company turnover is RM8 million.
Then your small RM400,000 company may still be pulled into e-Invoice.

Why?
Because the group structure matters.

Same issue if you have a corporate shareholder with RM1 million or more turnover.

Same issue if you are a subsidiary of a holding company with RM1 million or more turnover.

Same issue if you have a related company or joint venture with RM1 million or more turnover.

This is where many SME bosses get caught.
They check their profit and loss.
They check their sales.

Then they proudly say:
“I am below RM1 million.”

But LHDN may reply:
“Yes, you are small. But your structure is not small.”

Before 1 July 2026, SME bosses should do three simple checks.

First, check your revenue based on the correct year.
Do not use feeling.
Use audited accounts or tax return.

Second, check your company structure.
Who are your shareholders?
Any corporate shareholder?
Any holding company?
Any related company?

Third, if any of them has turnover of RM1 million or more, please do not wait until year end.

You may already be in scope from 1 July 2026.

The penalty is not small.
Failure to issue valid e-Invoice can be an offence under Section 82C of the Income Tax Act 1967.
Fine can be from RM200 to RM20,000 per invoice, and possible imprisonment up to six months.

Yes, there is relaxation period.
But relaxation period is not holiday.
It is only time given for businesses to stabilise.

The RM1 million exemption is real.
For genuinely standalone small businesses, it is a big relief.
But if your company sits inside a group, please check properly.

Because in e-Invoice, your company may be small.
But your structure may be the reason you are already inside.
When in doubt, check your structure before you claim your exemption.

Read the full content in our blog
https://lnkd.in/dKjWnuXf