Stamp Duty Forum: Compliance & Optimisation

Prior to 2025, stamp duty was often not a mainstream topic and hence businesses may have inadvertently overlooked stamping instruments such as intragroup financing agreements, intragroup rental agreements, service agreements (intragroup as well as with unrelated vendors) and so on. Here is an opportunity to make good the compliance gap without any penalty.

The Stamp Duty Voluntary Disclosure (SD-VD) program rolled out by the Malaysian Inland Revenue Board (LHDN) today allows for instruments signed between 1 January 2023 and 31 December 2025 to be submitted for stamping without any penalty – provided the duty is paid by 30 June 2026.

Without the SD-VD program, failure to pay stamp duty for instruments executed prior to 1 January 2026 attracts penalty of 20% of the unpaid duty, subject to a minimum of RM100 per instrument.

SD-VD is not applicable for instruments executed prior to 1 January 2023 or after 31 December 2025. However, pursuant to an earlier announcement, for any stamp duty return form submitted during the calendar year 2026, there would be no penalty in respect of any undercharged duty in the stamp duty return form.

The penalty waiver during the SD-VD program period is automatic, i.e. there is no need to make any application for the penalty waiver. Any penalty imposed in the notice of assessment would be automatically waived provided the duty is paid by 30 June 2026.

LHDN has assured in writing that the instruments in the SD-VD program would not be audited, but bear in mind that:

1. The penalty waiver does not apply to cases where there are elements of fraud, such as instances where there is intention to avoid payment of stamp duty.
2. Companies participating in the voluntary disclosure are not precluded from being audited altogether. The entities may still be audited with regards to other instruments that are not submitted for stamping per the SD-VD program.

Read IRB Full announcement here. 

Hence, it is vital for businesses to perform comprehensive review amid participation in this program.

It is not unusual for experts to express different views in relation to the duty treatment for the same instrument. In an effort to reconcile divergent views and provide actionable inputs for tax and finance professionals, we bring together 10 tax experts from Shearn Delamore & Co (Drew Network Asia (DNA)), Christopher & Lee Ong (Rajah & Tann Asia), Rosli Dahlan Saravana Partnership (RDS), Raja, Darryl & Loh (RDL), Rahmat Lim & Partners, Lee Hishammuddin Allen & Gledhill (LHAG) and the Malaysian tax authority (LHDN) in a pioneer stamp duty forum hosted on 10 February, in conjunction with the Malaysian Institute of Accountants (MIA), in the vicinity of TRATAX’s office. The program focuses on both compliance and optimisation of duty exposure.

Details are as follows.

Click here for more details.

Registrations are handled by MIA. Email sp@mia.org.my for enquiries. Course fee is borne by HRDC for eligible employers. For consulting enquiries, get in touch with your contact person at TRATAX or email corp@tratax.my.

The contents of this mailer are of generic nature. Strictly no liability assumed.