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Stamp duty is a tax levied on a variety of written instruments specifies in the First Schedule of Stamp Duty Act 1949. In general, stamp duty imposed to legal, commercial and financial instruments.

The Assessment and collection of Stamp Duties is sanctioned by statutory law now described as the Stamp Act 1949.


There are two types of duties:

  1. Ad volerem duty
    Duty varies in amount in some specified proportion to the amount or value of some obligation incurred or discharged or some property affected by the instruments.
    The Stamp Act 1949 provides for:-
    The imposition of ad valorem Duties (that is, according to the value) on:
    1. instruments of transfer (implementing a sale or gift) of property including marketable securities (meaning loan stocks and shares of public companies listed on the Bursa Malaysia Berhad), shares of other companies and of non tangible property (e.g. book debts, benefits to legal rights and goodwill);

    2. instruments creating interests in property (e.g. Tenancies and Statutory Leases);

    3. instruments of security for monies including instruments creating contracts for payment of monies or obligation for payment of monies (generally described as `Bond`); and

    4. certain capital market instruments (e.g. Contract Notes)

b. Fixed duty
The Imposition of Fixed Duties on:

i. a number of other legal, commercial, mercantile or capital market instruments (e.g. Power or Letter of Attorney, Articles of Association of a Company, Promissory Notes, Policy of Insurance etc); and

ii. a duplicate or a subsidiary or a collateral instrument when it can be shown that the original or principal or primary instrument has been duly stamped.


  1. The first step is to identify the class of instrument under which a particular chargeable instrument may fall into. In the case of standard instruments, the rule in classification of instruments is that the real and true meaning of the instrument is to be ascertained, that the description of it given in the instrument itself by the parties is immaterial.

    Whereas in the case of non-standard instruments, the substance of the instrument, as construed by examination of the rights and obligations created and not its FORM will determine its classification. Examples where this RULE would apply include instruments effecting divestment of rights or interests in property by way of a ` Declaration of Trust` or a `Deed of Family Arrangement` or release on `Sale` or by way of `Gift` or by way of `Security`.

  2. The second step involves statement of liability of standard instruments where an instrument is liable to stamp duty within two different categories or heads. It is provided that distinct matters including separate considerations shall be separately charged.

  3. The third step involves non-standard instrument which by its classification will be liable to ad valorem duty. This instrument would require examination and when appropriate, measurement of the value of the consideration, that is, the price of the promise or act to be performed by the instrument.

The major principle in the application of the law on stamp duties is that the subject matter of tax is the INSTRUMENT and not the TRANSACTION. For example, agreement made verbally is not subject to stamp duty.


a. Purpose of adjudication

An application to determine the amount of duty chargeable on any executed instrument can be made to the Collector. For this purpose the Collector may require that the instruments be furnished together with an affidavit or other evidence. The Collector may refuse such application until the required instrument and evidence have been furnished accordingly.

The purpose of adjudication is to protect the parties to the contract in respect of the admissibility of the instrument as evidence in court during a civil proceeding. An instrument which is not duly stamped is not admissible in court as evidence.

b. Adjudication Of Instruments

With effect from 1st January 2009, the RM10 fee payable for adjudication of an instrument is no longer be imposed.


Section 52(1) of The Stamp Act 1949 PROHIBITS registration, acceptance or authentication of any instrument which has not been duly stamped.

If your duties include registration, acceptance or authentication of any instrument including share transfer and DEED OF ASSIGNMENT, contact the Deputy Collector of Stamp Duty if in doubt as to whether fixed duty or ad valorem duty is payable on the instrument.

Failure to comply with the provisions of this section is subject to a fine not exceeding RM1,500.00, under Section 69(2).


Unauthorised persons (e.g. clerk or office boy) SHOULD NOT BE INSTRUCTED to represent your firm in technical matters and procedures regarding stamping. If in doubt of any technical matters or procedures, please contact The Deputy Collector of Stamp Duty for clarification.


An instrument may be stamped within 30 days of its execution if executed within Malaysia or within 30 days after it has been first received in Malaysia if it has been executed outside Malaysia.

If it is not stamped within the period stipulated, a penalty of

(a) RM25.00 or 5% of the deficient duty, whichever is the greater, if stamped within 3 months after the time for stamping;

(b) RM50.00 or 10% of the deficient duty, whichever is the greater, if stamped after 3 months but not later than 6 months after the time for stamping;

(c) RM100.00 or 20% of the deficient duty, whichever is the greater, if stamped after 6 months from the time for stamping;

may be imposed

(the above rates are effective from 1/1/2003)


Payment may be made in the following manner:-

  1. Cash (if the duty does not exceed RM100) or

  2. Revenue Stamp (if the duty does not exceed RM500) or

  3. Money Order, Solicitor`s Cheque or Bank Draft, made payable to the Collector of Stamp Duty and sent together with the relevant instrument to the stamp duty office by hand or through registered post


Relief may be given pursuant to Section 15 and Section 15A Stamp Act 1949 :



Year 2007 - Stamp Duty Order (Remittance)

Year 2008 - Stamp Duty Order (Remittance)

Year 2009 - Stamp Duty Order (Remittance)

Year 2009 - Stamp Duty Order (Exemption)

Year 2010 - Stamp Duty Order (Exemption)

Hit(s) : 94,999
Updated : : 2011-06-21 09:50:53

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