Basis of taxation
Stamp duty is chargeable on instruments and not on transactions.
An unstamped or insufficiently stamped instrument is not admissible as evidence in a court of law, nor will it be acted upon by a public officer.
Assessment and payment of stamp duty can be made electronically via the Stamp Assessment and Payment System.
Self-assessment stamp duty system is proposed to be implemented in phases based on the types of instruments or agreements.
|
Effective Date |
Types of instruments / agreement |
Phase 1 |
From 1 January 2026 |
Rental or lease, general stamping and securities |
Phase 2 |
From 1 January 2027 |
Instruments of transfer of property ownership |
Phase 3 |
From 1 January 2028 |
Other than those stated in Phase 1 and Phase 2 |
Rates of duty
The rates of duty vary according to the nature of the instruments and transacted values. W.e.f 1 January 2025, a minimum duty of RM10 is imposed on dutiable instruments less than RM10 except cheques and contract notes. Generally, transfer of properties can give rise to significant stamp duty:
a. Properties (other than shares, stock or marketable securities)
1. Other than foreign companies, non-citizens and non-permanent residents
|
Value (RM) |
Rate |
Duty payable (RM) |
||
On the first |
100,000 |
RM1 per RM100 or part thereof |
1,000 |
||
On the next |
400,000 |
RM2 per RM100 or part thereof |
8,000 |
||
On the next |
500,000 |
RM3 per RM100 or part thereof |
15,000 |
||
|
1,000,000 |
|
24,000 |
||
In excess of |
1,000,000 |
RM4 per RM100 or part thereof |
|
||
2. Foreign companies, non-citizens and non-permanent residents
Flat rate stamp duty of RM4 per RM100 or part thereof (w.e.f 1 January 2024)
b. Non-listed shares, stock or marketable securities
RM3 for every RM1,000 or any fraction thereof based on consideration or value, whichever is greater. The Stamp Office generally adopts one of the 2 methods for valuation of unlisted ordinary shares for purposes of stamp duty:
- net tangible assets; or
- sale consideration.
c. Shares or stock listed on Bursa Malaysia
RM1.50 for every RM1,000 or any fraction thereof based on the transaction value. However, stamp duty in excess of 0.1% is remitted for instruments of contract notes executed on or before 13 July 2023 until 12 July 2028, with maximum stamp duty payable of RM1,000 per contract note.
d. Listed marketable securities
RM1 for every RM1,000 or any fraction thereof based on the transaction value, with maximum stamp duty payable of RM200 per contract note.
e. Service Agreements and Loan Agreements
Stamp duty of 0.5% on the value of the services / loans. However, stamp duty may be remitted in excess of 0.1% for the following instruments:
1. Service agreement
|
|
Stamp duty |
|
All service agreement (one tier) |
|
Ad valorem rate of 0.1% |
|
Multi-tier service agreement: a) Non-government contract (i.e. between private entity and service providers) |
First level |
Ad valorem rate of 0.1% |
|
Subsequent level(s) |
Up to RM50 |
||
b) Government contract (i.e. between Federal / State Government or State / local authority and service providers) |
First level |
Exempted |
|
Second level |
Ad valorem rate of 0.1% |
||
Subsequent level(s) |
Up to RM50 |
||
2. Loan agreement / loan instrument
Malaysian Ringgit loan agreements generally attract stamp duty at 0.5% However, a reduced stamp duty liability of 0.1% is available for Malaysian Ringgit loan agreements or instruments without security and repayable on demand or in single bullet repayment.
The stamp duty on foreign currency loan agreements would be the same as Malaysian Ringgit loan agreements which is 0.5%
The stamp duty on loan or financing agreement based on Shariah principles, other than hire purchase executed from 1 January 2025 would be at a flat rate of RM10.
Stamping
Instruments executed in Malaysia which are chargeable with duty must be stamped within 30 days from the date of execution. When the instruments are executed outside Malaysia, they must be stamped within 30 days after they have first been received in Malaysia.
Penalty
The penalty imposed for late stamping varies based on the period of delay. The maximum penalty is RM100 or 20% of the deficient duty, whichever is higher.
Relief / Exemption / Remission from stamp duty
Examples of the exemptions, remissions or reliefs of stamp duty available are as follows:
1. Merger and acquisition
Relief on the transfer of the undertakings or shares under a scheme of reconstruction or amalgamation of companies (conditions apply).
- Relief on the transfer of property (excludes transfer of business) or shares between associated companies, where either company owns 90% or more of the other company, or where a third company owns 90% or more of both associated companies (conditions apply).
2. Financing instrument
- Stamp duty exemption on loan / financing agreements executed from 1 January 2022 to 31 December 2026 between MSMEs and investors for funds raised on a peer-to-peer platform registered and recognised by the Securities Commission (SC).
- Stamp duty exemption on instrument of agreement for a loan or financing in relation to a Micro Financing Scheme for an amount up to RM50,000 (increased to RM100,000 for loan or financing agreement executed from 1 January 2025) (approved by the National Small and Medium Enterprise Development Council) between a MSMEs and a participating bank or financial institution.
- Stamp duty exemption on all loan or financing instruments in relation to the Professional Service Fund for an amount up to RM50,000 between a borrower and Bank Simpanan Nasional.
- Stamp duty exemption on all instruments of an Asset Sale Agreement & Asset Lease Agreement executed between a customer and a financier made under Syariah law principles for renewing any Islamic overdraft/revolving financing facility, provided the instrument for existing facility is duly stamped.
- Stamp duty on any instruments of an Asset Lease Agreement executed between a customer and a financier made under the Syariah principles for rescheduling or restructuring any existing Islamic financing facility is remitted to the extent of the duty that would be payable on the balance of the principal amount of the existing Islamic financing facility, provided the instrument for existing Islamic financing facility has been duly stamped.
- Stamp duty exemption on all instruments relating to the purchase of property by any financier for the purpose of leaseback under the principles of Syariah or any instrument by which the financier shall assume the contractual obligations of a customer under a principal sale and purchase agreement.
- Stamp duty exemption on loan or financing agreements executed from 1 July 2021 to 31 December 2024 in relation to restructuring or rescheduling of business loans due to the inability of the borrower to comply with existing repayment schedule consequent to deteriorating financial conditions.
- Stamp duty exemption on loan or financing instruments executed from 1 January 2025 to 31 December 2026 by MSMEs and investors through Initial Exchange Offering platforms registered with SC.
3. Instrument of transfer
- Remission of 50% of stamp duty chargeable on the instrument of transfer of immovable property operating as voluntary disposition between parent(s) and child and vice versa, executed before 1 April 2023 and provided that the recipient(s) is a Malaysian citizen.
- Stamp duty exemption on the instrument of transfer of property (executed from 1 April 2023) by way of love and affection between parents and children, grandparents and grandchildren, limited to the first RM1 million of the property’s value, provided the recipients are Malaysian citizens. The balance of the property’s value is given 50% remission on the ad valorem stamp duty imposed.
- Exemption for instruments of transfer of immovable property operating as voluntary disposition between husband and wife.
- Stamp duty exemption on all instruments of transfer of land, business, asset and share in relation to the conversion of a conventional partnership or a private company to be a limited liability partnership.
- RM10 fixed duty for instrument of transfer of any property by way of release or renunciation by a beneficiary of a deceased estate to another beneficiary entitled under the same estate.
4. Abandoned housing projects
- Stamp duty exemption on instruments executed by a rescuing contractor or a developer approved by the Minister of Housing and Local Government to carry on rehabilitation works for an abandoned project. The instruments are loan agreements approved by the approved financier and instruments of transfer for the purpose of transferring revived residential property in relation to the abandoned project which are executed by 31 December 2025.
- Stamp duty exemption on instruments executed by an original purchaser, whose name is stated in the Sale and Purchase Agreement in relation to an abandoned project, or his beneficiary. The instruments are loan agreements approved by the approved financier and instruments of transfer which are executed by 31 December 2025.
5. Capital market
- Stamp duty exemption on specified instruments for the purpose of a securitisation transaction.
- Stamp duty exemption on all instruments relating to the issue of, offer for subscription or purchase of, or invitation to subscribe for or purchase debentures or Islamic securities approved by the SC and the transfer of such debentures or Islamic securities.
- Stamp duty in excess of RM200 is remitted for instruments of contract notes relating to the sale of shares, stocks or marketable securities in companies incorporated in Malaysia or elsewhere between a local broker and an authorised nominee on behalf of a foreign broker.
- Stamp duty exemption on contract notes for sale and purchase transaction of structured warrant or exchange-traded fund approved by the SC, executed by 31 December 2025.
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