Attention Business Owners: What You Must Complete by 31 December 2025

Published: 15 December 2025

As 2025 draws to a close, Malaysian businesses are approaching one of the most important tax deadlines in recent years. Beginning 2026, Malaysia’s tax landscape will undergo major upgrades — including full e-Invoice implementation, the end of SST compliance leniency, and the formal launch of Stamp Duty self-assessment.

For business owners, what gets done before 31 December 2025 will directly affect compliance risks, operating costs, and penalties in 2026.

To help you prepare, we have summarised the three key tax matters you must complete before year-end.

1. Stamp Duty: Employment Contracts Must Be Stamped by 31 December 2025

All employment contracts signed in 2025 must be stamped by 31 December 2025 to avoid late-stamping penalties.

In recognition of the compliance challenges faced by employers, a grace period has been granted for employment contracts — as long as they are stamped by year-end, no penalty will be imposed.

Stamping Requirement

Contract Signing Date	Stamp Duty?	Penalty?
Before 01.01.2025	No	No
01.01.2025 – 31.12.2025	Yes (RM10)	Must be stamped by 31.12.2025 to avoid penalty
01.01.2026 onwards	Yes (RM10; stamp within 30 days)	Late stamping will trigger penalties

In addition, starting 2026, the Stamp Duty Self-Assessment System will be officially enforced, under which taxpayers will be responsible for calculating the applicable stamp duty, submitting the necessary declarations, and ensuring timely payment in accordance with the relevant laws and guidelines.

Action Required Before 31 December 2025:
✔ Ensure all employment contracts signed in 2025 are stamped before year-end.
✔ Prepare internal processes for stamp duty self-assessment starting 2026.

2. SST Compliance: Grace Period Ends on 31 December 2025

The Sales & Service Tax (SST) expansion has already taken effect, and the government has introduced a “soft-landing” leniency period lasting until 31 December 2025. During this period, businesses that proactively regularise and begin complying with SST will generally not be the primary target of enforcement penalties, provided there is no deliberate non-compliance and they demonstrate genuine effort to meet SST requirements.

What Happens After 2025?

• From 1 January 2026, the compliance grace period ends.
• SST enforcement and audits are expected to become stricter

Action Required Before 31 December 2025:
✔ Review whether your business activities fall under the expanded SST scope.
✔ Register and comply early to avoid enforcement penalties.
✔ Ensure your invoicing, systems, and reporting processes are SST-compliant.

3. e-Invoice: Mandatory for RM1–5 Million Businesses from 2026

Malaysia will fully roll out e-Invoice by 2026, with the final phase beginning on 1 January 2026.

This phase applies to taxpayers with annual revenue between RM1 million and RM5 million.

Businesses with annual revenue below RM1 million are exempted unless they choose to participate voluntarily.

Why Prepare Now?

• Implementation involves system upgrades, API integration, staff training, and process redesign.
• Delaying preparation will lead to higher costs and operational disruption in 2026.

Action Required Before 31 December 2025:
✔ Assess your business’s readiness for e-Invoice.
✔ Begin system integration and workflow design.
✔ Educate your team and align processes early.

Why Is the End of 2025 So Critical?

Starting 2026, Malaysia will enforce:

• Full mandatory e-Invoice
• Stricter SST compliance with no leniency
• Formal Stamp Duty self-assessment

Failing to complete the necessary preparations in 2025 could result in:

• Higher compliance costs
• Increased audit risks
• Delays and operational disruptions
• Potential penalties or late-stamping surcharges

In short, doing nothing this year means facing higher risk next year.

How YYC Can Help

YYC’s tax specialists are ready to support your business in navigating all upcoming 2026 requirements, including:

• Stamp Duty compliance review
• SST assessment, gap analysis, and registration support
• e-Invoice implementation, training, and system integration

Let us help you stay compliant — and enter 2026 with confidence.

📩 Contact YYC today to get started.