(Tax Update) Malaysia Stamp Duty Overhaul : Self-Assessment and Higher Penalties Part 8

01Official: IRB Confirms Penalty-Free Stamping for Employment Contracts Until Dec 2025

Credit : 南洋商报 Nanyang Siang Pau 2/6/2025

02Temporary Penalty Waiver

• IRB is waiving late penalties for stamping existing employment contracts.
• Valid for contracts stamped by 31 December 2025 only.

No Extension

• The waiver is strictly one-time. No further extension after 2025.

New Contracts: 30-Day Rule

• New employment contracts must be stamped within 30 days of signing.
• Late stamping penalties:31 days to 3 months: RM50 or 10%, whichever is higher.More than 3 months: RM100 or 20%, whichever is higher.

Late stamping penalties:

• 31 days to 3 months: RM50 or 10%, whichever is higher.
• More than 3 months: RM100 or 20%, whichever is higher.

Which Employment Documents Must Be Stamped?

• Employment contracts
• Renewal letters (if treated as new contracts)
• Fixed-term contracts (including renewals)

Documents Not Subject to Stamp Duty

• Offer letters
• Bonus letters
• Annual increment letters
• Confirmation of employment letters
• Loan letters (not part of a new employment contract)

Recommended Action for Employers

• Review all employment contracts signed since 2022.
• If unstamped, submit for stamping with a request letter to waive penalty.

Post-2025: Self-Assessment Era

• From 1 January 2026, IRB will implement self-assessment for stamp duty.
• Audits and backdated assessments up to 5 years may apply.

Industry Feedback

• Business groups (MEF, SME Association, NCCIM) raised concerns on admin burden and cost.
• Many urge clearer guidelines and long-term exemption for SME employers.

KTP Takeaways

Take this grace period seriously — act before 31/12/2025 to avoid unnecessary penalty and compliance headache later.

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

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