kena sign sales

ent, stamp duty

greement tu
njual.
TAX517
TOPIC 5:
a rumah, kita
rjanjian dngn
an deposit 2
tempoh 3 bulan
ah. Lepas STAMP DUTY
n agreement,
mkan agreement.
greement tu
kat mahkamah
 LEARNING OUTCOME
Ability to:
•Understand the legislation, scope of stamp
duty, and instrument chargeable with duty
•Understand the exemption and relief under
section 15 and section 15A
•Understand the withdrawal of exemption and
relief
a
49.

tax
a
s
INTRODUCTION
beli
The imposition of stamp duty in Malaysia is
atas governed by the Stamp Act 1949.
as
ai
Stamp duty is chargeable/ imposed on certain
atas instruments or documents and not transactions (s
4 of SA). For example, agreement made verbally
mp is not subject to stamp duty
Act
The instruments which subject to stamp duty are
or those specified in the First Schedule of the Stamp
any
Act 1949
hip,
fa
 INTRODUCTION
t2

An instrument is defined as any written

document for PROPERTIES, STOCK, SHARES
OR MARKETABLE INSTRUMENTS.
Stamp duty is levied on legal, commercial and
financial instruments.
lve, The person liable to pay stamp duty is set out in
the Third Schedule of Stamp Act 1949.
iap
re
y RM
INTRODUCTION
da
In other word, stamp duty is charged on the basis
ment. of the money value of the consideration between
h two parties (buyer and seller).
so
za for The rate of duty varies according to the nature of
the instruments/documents and transacted values.
ent,
Exemption/ relief of stamp duty is given on
wak
asi
certain instruments and documents.
k..
hase

ty.
mlah
kisah
nt or
SCOPE / TYPES OF STAMP
DUTY
ut

of

nt

r),
of a

nce

her
e

nt
r
hever
to
ed
Example of fixed duties (as per the first
schedule of stamp act 1949)

w.e.f 1 Jan 2001. Prior to that, the charged is RM3

 Example of fixed duties (as per the first
schedule of stamp act 1949)
Budget 2019: delete item 10 & 53 and
replace with item 29A

 Example:

 CIMB Bank Berhad issued a cheque book to a new customer

who just opened a current account.
 The stamp duty for each cheque issued by the bank is 15 sen
as specify in item 29, First Sch of SA
Example of AD VALOREM duties (as per the
First Schedule of Stamp Act 1949)

Budget 2019: New bands

introduced
 Comparison with market value for Item
duty
32 of the first Schedule of Stamp Act 1949

ni
• The sale of any property under item 32(a) of the First Schedule
requires the imposition of stamp duty to be based on either:
t
u a) Value of consideration; or
a
b) Market value of the property (whichever is the greater).

• The date for determining the MV of any property being

transferred, settled or gifted is provided under s12A of the Act.
STAMP DUTY CALCULATOR – BY JPPH
– JABATAN PENILAIAN DAN
PERKHIDMATAN HARTA
 STAMP DUTY CALCULATOR –
EXAMPLE INCORPORATING 2019
BUDGET

Source: https://malaysiahousingloan.net/legal-
fees-calculator/
n& PAYMENT OF STAMP DUTY USING 2) M
kit
PRIVATE VALUATION – gu
lep
nak INITIAL DUTY – S36A du
ik act
Effective 1 January 2008, private valuation by a practicing ole
valuer is accepted for the determination of an “ initial duty” bay
ate dk
cing payable in order to expedite the transfer of real property prior to
utk
n the official valuation being issued.
3) N
n The payment for the initial duty must be made together with a
Bez
sset bank guarantee, which valid for a period of not less than 6 and
on months. -of
on= ass
dan The amount of the bank guarantee is computed based on the pri
h difference in stamp duties between the official valuation and the
private valuation, with the official valuation being deemed to be
35% higher than the private valuation.
 PAYMENT OF STAMP DUTY USING
PRIVATE VALUATION –
INITIAL DUTY – S36A
The amount of the bank guarantee is computed based on the following
formula:

y
 Example of initial duty payable & bank
guarantee
• Example 1:

• Encik Afiq purchase a 3 storey bungalow at a consideration (MV) of RM1.3 million

• The amount of bank guarantee will be: A-B

n
ayar

eal
Penalty on Incorrect estimates
mpau
y
Taxpayer must ensure the duty paid reflects the actual market value

To avoid lost of revenue to the Government, S 36B(6) provides that in

any event the initial duty plus the bank guarantee > 30% of the actual
bank
stamp duty, 10% penalty will be imposed on the excess:
n.
the Actual stamp duty computed by Govt valuer A
Initial duty XX
ra.
tu, Bank guarantee amount XX (XX)
bila
Additional stamp duty XX
tual 30% of A (XX)
Excess XX
Penalty (10%) XX
 Example of additional duty payable
 Using the same Example 1, the government valuer determined the value of
the bungalow to be RM2.7 mil.


p
e
ADDITIONAL ASSESSMENT
3
s
al n
The Collector (Govt) may, within 3 months after payment of c
Due the initial duty, issue an additional assessment for the g
additional duty payable. k
l
The additional duty must be paid within 30 days after the c
service of notice of the additional assessment b
i a
ys Failure which, the Collector shall call upon the bank c
guarantee to satisfy the duty payable. If the bank guarantee
amount is insufficient, the remaining duty unpaid shall be 4
increased by 10%. d
30 d
, An appeal against the additional assessment may be made a
a
l within 30 days from the date of the additional assessment. a

=
 TIMING TO STAMP THE
INSTRUMENTS
 All instruments chargeable to stamp duty and executed by any person in Malaysia shall be stamped before or at
the time of execution.

 Instrument executed outside M’sia (transfer of immovable property in M’sia @ transfer of shares/ debentures ):

 The transfer shall not take effect unless it is stamped within 30 days after it has been received in Malaysia.

 Evidence of 30 days:

1. Production of envelope in which the instrument was received

2. Any supporting/ corresponding letter

3. ri statutory declaration.
The date of instrument shows that it must have been received in M’sia by
d a li a .
h tra the
ma usafter
 Penalty for late stamping will be imposed if the instrument risustamped 1 9.30 days grace period
e l i t d i A 6/2 0
b
h a rd ibua a 1/
Ric n d p ad een ays
) a
(3 janji ma has b 30 dh
h
o nto , per a ru er it ithin te
-C mad erim s aft a. W da
t e
Ah hard 0 day laysi ) du
c 3 a 9
TIME OF STAMPING AFTER
ADJUDICATION – S 40
nt
PENALTY FOR LATE STAMPING –
S 47A(1) I
e
n M
Any instrument that is not stamped within the specified -
time, the penalty as follows: a
a
-
d
r

1
s
d
2
s
s
3
s
REMISSIONS/ Exemptions / reliefs of stamp duty
REMISSIONS/ Exemptions / reliefs of stamp duty
REMISSIONS/ Exemptions / reliefs of stamp duty
REMISSIONS/ Exemptions / reliefs of stamp duty
as per first schedule

• General exemptions under Section 35 in First Schedule, Stamp Act

1949 and Specific exemptions under item 2, 4 and 32 in First
Schedule, Stamp Act 1949.
• General exemption Section 35 -> Instruments relating exclusively to
immovable property situated out of Malaysia or relating exclusively to
things done or to be done out of Malaysia.
• Relief may be given pursuant to Section 15 and Section 15A, Stamp
Act 1949 for item 32 of the First Schedule:
1. Section 15 -> relief from Stamp duty for reconstructions or
amalgamations of companies.
2. Section 15A -> Relief from Stamp Duty for transfer of property
between associated companies.
Amalgamation vs reconstruction
SECTION 15 - Relief from Stamp duty for Reconstructions or
Amalgamations of Companies .
Sec 15 of the SA provides relief from stamp duty for the RECONSTRUCTION
OR AMALGAMATION of companies if the following CONDITIONS are met:
 WITHDRAWAL OF SECTION 15 RELIEF
– SEC 15(5)
 S. 15 of the Stamp act will be withdrawn if:

1. The claim of the exemption is based on untrue particulars.

2. The existing company cease to be beneficial owner of the shares in the
transferee company within 3 years (Prior to 2019 – 2 years).
3. The transferee company ceases to be the beneficial owner of the shares in the
existing company within 3 years.
 Each company shall notify the stamp duty office within 30 days from the
occurrence of the non-compliance above
 On revocation of stamp duty relief, the tax collector shall recover from the
transferee company the duty payable together with interest chargeable of 6% p.a

Existing company / target company - seller/ transferor

Transferee company / acquirer company – buyer
SECTION 15A - Relief from Stamp duty for
transfer of property between associated
companies
 Sec 15A provides relief from stamp duty for the transfer of property
between associated companies if the following CONDITIONS are
met:

1. The consideration or part of consideration must not be form from

non-associated companies (third party).

2. The companies involved in transfer of properties must be associated

companies.

3. The transfer is to achieve greater efficiency in operation; and

4. The transferee company is incorporated in Msia.

SECTION 15A - Relief from Stamp duty for
transfer of property between associated
companies
 Associated company -> one company holds at least 90% of the issued
share capital of the other, or a third company holds at least 90% of the
shares of both the disposer and the acquirer companies.
 The ownership can be direct or indirect through other companies.

Co A has 96% ownership of

Company A Co C (A is the beneficial
owner of C) – 75% + (60% x
35%) = 96% .
60% 75% So, Co C has to apply for
Sec 15A exemption to show
that Co A is its ≥ 90%
beneficial owner to satisfy
35% requirement of associated
Company B Company C company
 SECTION 15A - Relief from Stamp duty for
transfer of property between associated
companies
Sec 15A provides relief from stamp duty for the transfer of property between associated
companies if the following CONDITIONS are met (cont’ d):

5. The beneficial interest of the property shall not have been previously
transferred, directly or indirectly by non-associated companies.
6. The transferor or transferee should not cease to be associated by reason of a
change in the percentage of the issued share capital of the transferee in the
transferor or a third company (i.e. two companies, transferor or transferee
involved should not cease to be associated).
7. Statutory declaration is to be made by the following person to claim for the
exemption:
a) advocate & solicitor for peninsular Malaysia
b) advocate of the High Court for SS
 WITHDRAWAL OF SECTION 15A
RELIEF – SEC 15A(4)
 S. 15A of the Stamp act will be withdrawn if:
 WITHDRAWAL OF SECTION 15A
RELIEF – SEC 15A(4)

 Each company shall notify the stamp duty office within 30 days
from the occurrence of the non-compliance above
 On revocation of stamp duty relief, the tax collector shall
recover from the transferee company the duty payable together
with interest chargeable of 6% p.a