(TAX UPDATE) Malaysia’s New Stamp Duty Regulation for November 2026 … What Every SME Owner Must Know

(TAX UPDATE) Malaysia’s New Stamp Duty Regulation for November 2026 … What Every SME Owner Must Know

Introduction

Malaysia will implement the Self-Assessment System (SAS) for stamp duty starting 1 January 2026.
LHDN has released several new guidelines explaining duty payers’ responsibilities, penalty rules, and how stamp duty applies to movable property transactions on November 2025.

For SMEs that regularly buy assets, execute agreements or manage business transfers, these changes are important. The penalties for late action are clear and strict.

This article summarises the key points based strictly on the uploaded Stamp Act 1949 and official LHDN guidelines.

Key Summary of New Measures

Understanding What Is an Instrument

LHDN explains the meaning of an instrument, the nature of a written document, the scope of stamp duty under the Stamp Act 1949, available exemptions and reliefs, appeal procedures and the legal requirement to stamp documents. Duty payers will shoulder full responsibility under self-assessment.

Penalties for Late Stamping (Section 47A of the Stamp Act)

If an instrument is stamped within three months after the stamping deadline, the penalty is RM50 or 10% of the unpaid duty, whichever is higher, under section 47A(1)(a).

If the instrument is stamped more than three months late, the penalty increases to RM100 or 20% of the unpaid duty, whichever is higher, under section 47A(1)(b).

Even if an instrument is exempt from duty, it must still be stamped under section 4(a). Late stamping penalties under section 47A still apply.

Penalty for Late Duty Payment Under Self-Assessment

Under SAS, duty must be paid within 30 days from the deemed assessment.
If payment is late, the same penalties under section 47A apply.

A delay of less than three months attracts RM50 or 10% of unpaid duty.
A delay of more than three months attracts RM100 or 20% of unpaid duty.

New Guideline on Movable Property (Sale or Transfer)

LHDN now clearly distinguishes between business/individual assets and trade goods.

Business or Individual Assets

• The instrument of sale for movable assets such as machinery, vehicles or office equipment is subject to ad valorem duty under section 21(a).
• The duty is imposed under Item 32(a) or Item 32(aa) of the First Schedule.

• If there is no signed sale instrument, the instrument of transfer is charged instead under the same items.
• When both a sale instrument and a transfer instrument exist, only the sale instrument is charged ad valorem; the transfer instrument is subject to RM10 fixed duty.

Trade Goods

• The instrument of sale is exempt from duty under Item 4(a) of the First Schedule.
• However, any instrument of transfer is still chargeable under Item 32(a) or 32(aa).

This puts responsibility on SMEs to correctly classify whether the movable property is an asset or inventory.

SME Implications

Strict Stamping Timelines

Delays will now trigger automatic minimum penalties. Even exempt instruments cannot be ignored.

More Compliance Burden Under SAS

SMEs must determine duty chargeability, calculate the correct duty, make payment within 30 days, and keep proper records for potential audit.

Correct Classification Is Crucial

Confusing assets with trade goods may lead to wrong duty treatment and penalties.

RM10 Duty for Transfers Only Applies in Limited Situations

It applies only when the sale instrument has already been charged ad valorem duty.

KTP’s View

Stamp duty is often overlooked compared to income tax or SST. But with SAS starting 2026, the risk of non-compliance will rise sharply. Penalties under section 47A are designed to discourage delays and force proper stamping behaviour.

SMEs must be especially careful with movable assets, business transfers and internal restructuring. The new guidelines show LHDN’s intention to enforce clarity and consistency in stamp duty treatment.

Call to Action

Before 1 January 2026, SMEs should:
• review all agreements and instruments used in business
• identify which documents require stamping
• set internal SOPs for timely stamping
• classify assets and trade goods correctly
• prepare for self-assessment and record-keeping

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