FAQs
Introduction to stamp duty in Malaysia
Stamp duty is a tax levied on certain written legal instruments listed under the Malaysian Stamp Act 1949, ensuring their validity and enforceability in courts. Electronic documents are also stampable. Common documents requiring stamping include employment contracts, general contracts, service agreements, tenancy agreements, loan agreements, and share transfers. Stamp duty rates vary according to the nature of the instruments and transacted amounts. The rates are set out in the First Schedule of the Stamp Act 1949.
Transition to the self-assessment system (SAS)
As announced in the Malaysian Finance Act 2024 and Measures for the Collection, Administration and Enforcement of Tax Bill 2024, stamp duty will transition to a self- assessment system (SAS) in phases from 2026 to 2028. This places the responsibility on taxpayers, both individuals and corporate entities, to accurately calculate and declare stamp duty without prior adjudication by the Inland Revenue Board of Malaysia (IRB).
Who must assess the stamp duty?
Under SAS, the IRB will no longer issue assessment notices before payment. Instead, tax- payers or their agents must submit documents and payments directly via the LHDN stamps portal: https://mytax.hasil.gov.my/. The IRB will use tax audits to ensure compliance, resulting in risk of penalties to tax payers for non-stamping, errors in calculation, or errors in document classification.
When must an instrument be stamped?
Stamping must be done within 30 days of execution, or within 30 days of entry into Malaysia if signed abroad, in order to avoid penalties. Failure to comply can render documents inadmissible in legal proceedings and result in financial penalties.
What penalties will apply?
Stamping must be done within 30 days of execution. Instruments stamped within three (3) months from the due date for stamping must pay an additional penalty of RM50 or 10% of deficient duty, whichever is greater. Instruments stamped after three (3) months from the due date for stamping must pay an additional penalty of RM100 or 20% of deficient duty, whichever is greater. This is on top of the stamp duty amount payable on the instrument. Failure to stamp an instrument can attract fines up to RM1,500 per offence per unstamped instrument, or special penalty equal to the same amount of stamp duty that was not paid.
Who Must Pay the stamp duty?
The person liable to pay stamp duty is set out in the Third Schedule of Stamp Act 1949 which varies depending on the type of instrument.
Malaysian Stamp Duty Calculator
How to use the stamp duty calculator?
First select the right calculator based on your instrument, then input the required fields, and you will receive a calculation of the stamp duty levied on that instrument, along with the rates and basis of calculation imposed by the Stamp Act 1949 of Malaysia.
Stamp duty payable by the Purchaser on the purchase/transfer of property is computed based on the higher of the purchase price or market value. Stamp office reserves the right to assess market value of the property.
The rate for foreign individual buyers of residential property will increase to a flat rate of 8%.The Sale and Purchase Agreement itself will only be stamped at RM10.
Exemptions
- First-time buyer who is an individual Malaysian citizen of property valued up to RM500,000.
- Transfers between husband and wife (full exemption)
- Transfers from mother/father to children, and from children to mother/father (partial exemption)*
- Transfers from grandmother/grandfather to grandchildren (partial exemption)*
- *Full exemption for the first RM1,000,000 or less from the value of the immovable property and 50% of the stamp duty chargeable on an amount in excess of RM1,000,000.
“child” means a legitimate child, a step child or child adopted in accordance with any law.
Transferee must be a Malaysian citizen. Additional conditions may apply.
Stamp duty on agreements for renting or leasing an immoveable property is calculated on the average annual rental.
Exemptions
- Agricultural Lease or Agreement for Agricultural Lease for any definite term not exceeding 3 years when the rent reserved does not exceed RM200 a year.
Select A Period
Fixed RM10 if contract value / periodic amount is unspecified.
In the First Schedule of the Stamp Act 1949, stamp duty on service agreements are split into 2 categories based on the term/period of the service agreement, whether it is for a definite period (item 22(1)(a)), or indefinite period (item 22(1)(b)) and different rates / remissions may apply.
If the service agreement has no contract value stated or no periodic payment is ascertainable, stamp duty is RM10.
If the service agreement has no contract value stated or no periodic payment is ascertainable, stamp duty is RM10.
Select A Period
Stamp duty on loan agreements are split into 2 categories based on the term/period of the agreement, whether it is for a definite period (item 22(1)(a)), or indefinite period (item 22(1) (b)) and different rates / remissions may apply.
This calculator is for loans denominated in Malaysian Ringgit only. Foreign currency loans are subject to 0.5% of the loan amount without maximum cap.
Notes
- Use figures from the company’s latest audited accounts no older than 18 months, which must be submitted / retained as proof.
- Total issued paid up capital will include both ordinary shares and preference shares.
- Stamp duty relief under section 15 or 15A of the Stamp Act may be available for corporate reorganizations or associated company transfers.
- Download the LHDN Guidelines 2020 here: https://phl.hasil.gov.my/pdf/pdfam/GP_SAHAM_2019_23062020_1. pdf
Stamp Duty Guide Center
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