Stamp Duty 2026: Critical Updates & What Malaysian Business Owners Must Prepare For

Published: 10 December 2025

Malaysia’s stamp duty framework is undergoing its most significant transformation in decades. Effective 1 January 2026, every business — from SMEs to MNEs — will require to enhance stamp duty compliance rules, higher compliance audit exposure, and a  shift toward self-assessment regime. 

If your business executes contract or agreement for leases, services, loan  arrangements, employment letters, acquisition of property, and transfer of shares (not an exhaustive listing), these changes apply to you. 

This article breaks down what’s changing, why it matters, and what business owners must do now to stay compliant and avoid unnecessary penalties. 

1. Stamp Duty Self-Assessment Begins 1 January 2026

The Inland Revenue Board of Malaysia (IRBM) is introducing a new Stamp Duty Self-Assessment System (STS). Businesses will now be responsible for declaring, calculating, and paying stamp duty themselves — similar to the self-assessment regime for income tax. 

Phased Implementation Timeline

Phase	Effective Date	Instruments Involved
Phase 1	1 January 2026	Rental/lease agreements, general stamping, securities
Phase 2	1 January 2027	Property transfer instruments excludes the involvement of JPPH assessment
Phase 3	1 January 2028	All remaining instruments

Core principle: Self-Declare. Self-Pay. Self-Accountable.

2. Understanding the Types of Stamp Duty in Malaysia

Stamp duties are imposed on instruments (also known as the executed agreement / contract / letter) and not transactions. In Malaysia, it falls under two main categories: 

1. Fixed Duty, and 
2. Ad Valorem Duty (percentage-based). 

Understanding these categories helps business owners correctly identify costs and compliance risks. 

A. Fixed Duty

Fixed duty is imposed on the instrument regardless of consideration paid / value stated. 

Common instruments charged fixed duty: 

• Employment contracts  

• Non-disclosure agreements (NDA) 

• Memorandums of Understanding (MOUs) 

• Declaration letters 

• Statutory declarations 

• General letters of appointment 

• Guarantees without property involvement 

B. Ad Valorem Duty (Percentage-Based)

Ad valorem duty varies according to the value stated in the instrument. These are typically higher-risk items for audits and penalties.

Common instruments charged ad valorem duty: 

1. Transfer of Property

• Residential/commercial property transfers 

• Stamp duty varies by property value tier 

• Special rate: 8% on the acquisition by non-citizens with effect from 1 January 2026.

2. Service Agreements

• Duty charged at 0.5% of the service value before any remission order to be applied 

• Includes consultancy, outsourcing, subcontracting, management services 

• Multi-tier contracts (main + subcontracts) must each be assessed separately

3. Lease / Tenancy Agreements

• Duty will vary depending on the rental period

4. Transfer of Shares / Marketable Securities

• Duty charged based on share value or consideration 

• Reduced rates may apply for listed shares

C. Instruments Exempt from Duty (With Conditions)

Some instruments may be exempt under general exemption: 

• Employment contracts up to RM3,000 monthly salary (effective 1 January 2026)

• Certain government contracts
• Sale of any goods, wares or merchandise  

Important: Exemption does not remove the need to submit for stamping. Adjudication is still required to prove compliance. 

Understanding these categories helps business owners estimate duty costs, plan budgets, and avoid misclassification — a key trigger for audit penalties under the 2025–2026 frameworks. 

3. The New Electronic Stamping System – MyTax Portal

The existing e-Stamping system will be fully integrated with MyTax. 

Businesses will be able to: 

• Log in through MyTax 

• Upload agreements 

• Self-assess and pay duties 

• Generate certificates instantly 

The taxpayer remains responsible for accuracy. 

4. Stamp Duty Audit Framework 2025: Higher Enforcement, Higher Risk

IRBM’s audit framework introduces stricter enforcement: 

• Audits covering up to 3 years 

• Unlimited time frame in cases of fraud or negligence 

• No voluntary disclosure once an audit begins 

• Potential stoppage orders and, in extreme cases, arrest without warrant 

Stamp duty is now a regulated compliance area — not merely paperwork. 

5. Employment Contracts: Key Changes for HR and Employers

A significant update for employers: 

Exemption threshold increase

• Previous exemption: ≤ RM300/month wages 

• New exemption (from 1 January 2026): ≤ RM3,000/month wages 

Transitional Rules

Contract Date	Duty?	Penalty?
Before 1 January 2025	Exempt	Waived if stamped by 31 December 2025
1 January – 31 December 2025	Yes	Remitted
From 1 January 2026	Yes	Penalties apply

6. Service Agreements: Still under 0.1% Duty

• Applies to agreements for services, consultancy, professional work, outsourcing, subcontracting 

• Duty calculated at 0.1% of total consideration 

• Remission order P.U.(A) 428/2021 still applies 

• Multi-tier contracts must be stamped separately

7. Property Transfers to Non-Citizens: Duty Increases to 8%

From 1 January 2026, residential property transfers to foreigners will be charged a flat 8% duty (up from 4%).

This change aims to regulate foreign ownership and strengthen stamp duty revenue. 

8. Penalties Are Increasing — Significantly

Late stamping penalties remain: 

• RM50 or 10%, whichever is higher (within 3 months) 

• RM100 or 20%, whichever is higher (after 3 months) 

Stamp duty compliance is now a high-stakes obligation. 

9. What Business Owners Should Do Now

1. Conduct a stamp duty health check

Identify unstamped agreements: 

• Service contracts 

• Employment contracts 

• Tenancy agreements 

• NDAs / MOUs 

• Partnership or joint venture documents 

• Loan agreements 

2. Strengthen internal SOPs

Define roles for HR, Legal, Finance, and Sales Team (when securing sales contract).

3. Budget for stamp duty

Especially for high-value service agreements and leases.

4. Prepare for digital migration

Ensure your team is MyTax-ready ahead.

5. Track IRBM’s upcoming guidelines

More updates expected throughout 2026.

Conclusion: Compliance Is No Longer Optional

The shift to self-assessment, coupled with higher penalties and tighter audits, marks a new compliance era for Malaysian businesses. 

Stamp duty is no longer “routine paperwork.” It is a regulated financial obligation requiring structure, awareness, and digital readiness. 

Businesses that prepare early — by upgrading SOPs, reviewing agreements, and staying informed — will navigate the transition smoothly and reduce compliance risks. 

If your business needs support assessing its stamp duty exposure or preparing for the 2026 transition, contact us now and YYC’s team is ready to assist.