(Tax Update) Malaysia Stamp Duty Overhaul : Self-Assessment and Higher Penalties Part 11

(Tax Update) Malaysia Stamp Duty Overhaul : Self-Assessment and Higher Penalties Part 11

Stamped or Not, Still Must Submit? The hidden headache of employment contracts under LHDN’s new stamping rules

Yesterday, something funny, but not so funny, happened in the office.

My HR manager came up and said:

“Boss, the LHDN officer in KL said... employment contract still kena stamp. Just no duty to pay.”

I almost spilled my kopi. So I told her, “Double confirm with Johor LHDN.”

One phone call later, the answer came fast and loud :

“Diwajibkan!”

Submission still needed. Just click “Pengecualian” for zero stamp duty.

So what actually happened?

On 6 June 2025, LHDN finally issued a media release to clarify the long-pending confusion :

* Employment contracts signed before 1 Jan 2025 are exempted from stamp duty.

Yes! even if exempted, you must declare and file it. Just tick “pengecualian” based on "confirmation" from LHDN officer.

Why this matters

For decades, nobody stamped employment contracts.

We thought it’s low-risk, non-litigious, and under the radar.

No enforcement = no problem.

But with self-assessment, the burden has shifted.

The rule is simple:

Submit all documents — even if no money is due.

Because if you don’t? That’s non-compliance.

Employment contract is just the tip of the iceberg.

Here are more unresolved grey areas:

1. Director advances – Even small amounts now need proper documentation and stamping.

2. Intercompany loans – Goodbye, casual IOUs or no agreement at all.

3. Director service agreements – Stamp duty or not? Depends who you ask.

4. Digital agreements – WhatsApp approvals? E-signatures? Still murky.

5. Hybrid contracts – Lease + services + options = which category?

6. Small staff advances – Is RM100 cash to staff dutiable?

7. Even our letter of engagement for audit and tax with amount ... kena submit?

8. Promotion and bonus letters, annual increment letters, letter of transfer within the company?

Final thought

I used to tell my team:

“Not everything needs to be stamped.”

Now I say:

“Everything needs to be submitted — even if it’s ‘free’.”

Because under the new regime, stamping isn’t just about payment.

It’s about declaration and accountability.

Even if your contract is clean, simple, and exempted...

Still "diwajidkan" masuk system.

PS : Authored by Mr Koh Teck Peng, the group principal, in his personal LinkedIn post.

Past blog on Stamp Duty
16 April 2025 Malaysia Stamp Duty Overhaul : Self-Assessment and Higher Penalties
https://www.ktp.com.my/blog/malaysia-stamp-duty-self-assessment/16apr2025

16 May 2025 Malaysia Stamp Duty Overhaul : Self-Assessment and Higher Penalties Part 2
https://www.ktp.com.my/blog/stamp-act-malaysia-2024-part2/16may2025

20 May 2025 Malaysia Stamp Duty Overhaul : Self-Assessment and Higher Penalties Part 3 https://www.ktp.com.my/blog/stamp-act-malaysia-2024-part3/20may2025

21 May 2025 Malaysia Stamp Duty Overhaul : Self-Assessment and Higher Penalties Part 4

https://www.ktp.com.my/blog/stamp-act-malaysia-2024-part4/21may2025

26 May 2025 Malaysia Stamp Duty Overhaul : Self-Assessment and Higher Penalties Part 5

https://www.ktp.com.my/blog/stamp-act-malaysia-2024-part5/26may2025

27 May 2025 Malaysia Stamp Duty Overhaul : Self-Assessment and Higher Penalties Part 6

https://www.ktp.com.my/blog/stamp-act-malaysia-2024-part6/27may2025

29 May 2025 Malaysia Stamp Duty Overhaul : Self-Assessment and Higher Penalties Part 7

https://www.ktp.com.my/blog/stamp-act-malaysia-2024-part7/29may2025

3 June 2025 Malaysia Stamp Duty Overhaul : Self-Assessment and Higher Penalties Part 8

https://www.ktp.com.my/blog/stamp-act-malaysia-2024-part8/03june2025

6 June 2025 Malaysia Stamp Duty Overhaul : Self-Assessment and Higher Penalties Part 9

https://www.ktp.com.my/chineseblog/stamp-duty-self-assessment-part9/6june2025

6 June 2025 Malaysia Stamp Duty Overhaul : Self-Assessment and Higher Penalties Part 10

https://www.ktp.com.my/blog/stamp-act-malaysia-2024-part10/06june2025

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