Ideas & Insights
Key Takeaway
- Responsibility for stamp duty assessment is now placed on taxpayers.
- Taxpayers are afforded the chance to regularize unstamped instruments and seek remission of penalties.
Many businesses are unaware that certain agreements — including
loan agreements, service contracts and shareholders’ agreements —
may be subject to stamp duty. The introduction of the Stamp Duty
Self-Assessment System and the Special Voluntary Disclosure Programme makes it timely for businesses to review their documenta-
tion and ensure compliance.
Stamp duty is a tax imposed on certain of written instruments specified in the First Schedule of Stamp Duty Act 1949 (“SA”) and not on the underlying transactions themselves.
There are two main categories of stamp duty:
Stamp duty is a tax imposed on certain of written instruments specified in the First Schedule of Stamp Duty Act 1949 (“SA”) and not on the underlying transactions themselves.
There are two main categories of stamp duty:
- Ad valorem duty – calculated based on the type and value of the instrument; and
- Fixed duty – imposed at a prescribed amount, typically starting from a nominal sum of RM10 per instrument.
STAMP DUTY SELF-ASSESSMENT SYSTEM (SDSAS)
Effective from 1 January 2026, the Inland Revenue Board of Malaysia
(“IRBM”) has implemented the Stamp Duty Self-Assessment System. The
implementation will be carried out in phases as follows:-
| Phase | Effective Date | Type of Instruments |
|---|---|---|
| Phase 1 | From 1 January 2026 | Instruments or agreements relating to rentals or leases, general stamping and securities. |
| Phase 2 | From 1 January 2027 | Instruments for transfer of property ownership. |
| Phase 3 | From 1 January 2028 | Instruments or agreements not covered under Phase 1 and Phase 2. |
RESPONSIBITIY OF DUTY PAYERS
Under SDSAS, taxpayers are responsible for determining, calculating and declaring stamp duty obligations.
For instruments executed in Malaysia, they must be stamped within 30 days of the date of execution. For instruments
executed outside Malaysia, the instrument must be stamped within 30 days from the date it is first received in Malaysia.
Taxpayers are also required to retain the stamped instruments and all related supporting documents for a minimum period of seven (7) years to ensure proper compliance and to facilitate any audit by IRBM.
Taxpayers are also required to retain the stamped instruments and all related supporting documents for a minimum period of seven (7) years to ensure proper compliance and to facilitate any audit by IRBM.
PENALTIES
| Late Stamping | |
|---|---|
| Period of Delay in Stamping | Penalties |
| Not exceeding 3 months | RM50 or 10% of the duty amount (whichever is higher) |
| Exceeding 3 months | RM100 or 20% of the duty amount (whichever is higher) |
| Executing or Signing Unstamped Documents | |
| Any person who executes or signs an instrument that has not been duly stamped may be liable to a fine of not less than RM1,000 and not exceeding RM10,000 | |
SPECIAL VOLUNTARY DISCLOSURE PROGRAMME (“SVDP”) FOR STAMP DUTY
On 28th January 2026, the IRBM has announced a Special Voluntary Disclosure (‘SDVP’) for stamp duty and
published a set of Frequently Asked Questions (“FAQs”) in relation to SVDP on its website.
During SDVP period from 1 January 2026 to 30 June 2026, all instruments executed from 1 January 2023 to 31 December 2025 may qualify for penalty exemption under Section 47A(2), Stamp Act 1949, subject to relevant conditions.
During SDVP period from 1 January 2026 to 30 June 2026, all instruments executed from 1 January 2023 to 31 December 2025 may qualify for penalty exemption under Section 47A(2), Stamp Act 1949, subject to relevant conditions.
Key Points from the FAQ
- Instruments executed between 1 January 2023 and 31 December 2025 are eligible for SVDP 2026, provided that stamping and payment of stamp duty payment are completed between 1 January 2026 and 30 June 2026;
- Eligible for SDVP 2026:-
| Stamping Submission Date | Status of Stamp Duty Payment | Status of Penalty |
|---|---|---|
| Before 1 January 2026 | Fully paid (including penalties) | Not eligible for SDVP |
| Before 1 January 2026 | No payment made within the SVDP period | Penalty not waived |
| 1 January 2026 – 30 June 2026 | Payment made within the SVDP period | Penalty waived |
- No appeal application is required and penalty will be automatically waived once the stamp duty is paid between 1 January 2026 to 31 December 2026;
- All instruments executed between 1 January 2023 and 31 December 2025 and stamped under SVDP 2026 will not be subject to audit. However, SVDP does not prevent the IRBM from auditing other instruments not disclosed under the SVDP;
- Cases involving fraud are excluded from the SVDP programme.
The FAQs are available in Bahasa Malaysia and can be downloaded from the IRBM’s official website:-
FAQs
FAQs
Action Points for Business
Businesses should consider taking the following steps:
1. Conduct an Internal Review of Documents
Businesses should review all contracts and written instruments executed between 1 January 2023 and 31 December 2025 to determine whether they are subject to stamp duty but have not been stamped.
Common examples include:
2. Identify Unstamped or Late-Stamped Instruments
Businesses should identify documents that:
These may qualify for penalty exemption under the SVDP if disclosed within the programme period.
3. Take Advantage of the SVDP Window
Where unstamped instruments are identified, businesses should submit the documents for stamping and pay the applicable stamp duty before 30 June 2026 to enjoy full penalty waiver.
4. Strengthen Internal Compliance Procedures
With the implementation of SDSAS, businesses should implement internal procedures to ensure that:
5. Seek Professional Advice Where Necessary
Businesses that are uncertain whether a document is subject to stamp duty should seek professional advice, as incorrect stamping or failure to stamp instruments may result in penalties.
Businesses should review all contracts and written instruments executed between 1 January 2023 and 31 December 2025 to determine whether they are subject to stamp duty but have not been stamped.
Common examples include:
- Rental or tenancy agreements
- Service agreements
- Loan agreements between companies or related parties
- Shareholders’ agreements
- Security documents (charges, debentures, guarantees)
- Memorandum of understanding (MOU) with binding terms
- Settlement agreements
2. Identify Unstamped or Late-Stamped Instruments
Businesses should identify documents that:
- have not been stamped, or
- were stamped after the statutory deadline.
These may qualify for penalty exemption under the SVDP if disclosed within the programme period.
3. Take Advantage of the SVDP Window
Where unstamped instruments are identified, businesses should submit the documents for stamping and pay the applicable stamp duty before 30 June 2026 to enjoy full penalty waiver.
4. Strengthen Internal Compliance Procedures
With the implementation of SDSAS, businesses should implement internal procedures to ensure that:
- new agreements are reviewed for stamp duty implications;
- stamping deadlines are monitored; and
- supporting documentation is properly maintained.
5. Seek Professional Advice Where Necessary
Businesses that are uncertain whether a document is subject to stamp duty should seek professional advice, as incorrect stamping or failure to stamp instruments may result in penalties.
If you would like assistance in reviewing your agreements or determining whether any instruments
require stamping, please feel free to contact us.
