(TAX UPDATE) Final Window to Fix Stamp Duty Gaps Without Penalty

(TAX UPDATE) Final Window to Fix Stamp Duty Gaps Without Penalty

IRBM Stamp Duty Voluntary Disclosure Programme and What SMEs Must Do Before 30 June 2026

Introduction

Stamp duty is one of the most misunderstood compliance areas for Malaysian SMEs.

Many business owners think stamp duty only applies to property transfers, loan agreements, or employment contracts. So they focus on income tax, SST, payroll, and e invoice. Stamp duty becomes an afterthought.

But stamp duty is different.

It is not about profit. It is not about whether you make money.

It is about documents. If you sign certain instruments, stamp duty can arise even when the value is small, even when it is internal group arrangement, even when it is a simple service agreement.

And when companies miss stamp duty, the biggest cost is rarely the duty.

The biggest cost is the penalty. A small duty of RM10 per instrument can grow into a very painful penalty exposure when you have many agreements signed over a few years.

That is why IRBM’s voluntary disclosure programme for stamp duty is important. It gives SMEs a practical window to clean up past omissions with a full penalty waiver, but only if you act within the deadline and complete payment on time.

Key Summary

Below is a clear summary in SME language, not legal language.

What is being offered

A full waiver of penalties for late stamping.

You still need to pay the stamp duty that is payable for the instrument. But the penalty component is waived when you meet the programme conditions.

Which documents are covered

The programme covers instruments executed from 1 January 2023 to 31 December 2025.

So it is a three year clean up window.

What you must do to qualify

Two actions must be completed by 30 June 2026.

First, submit the instrument for adjudication through the proper platform.

Second, complete payment of the stamp duty by 30 June 2026.

This point is critical. Submission without payment is not enough.

No separate application

There is no special application letter required.

The benefit is tied to the act of voluntary disclosure, submission, and payment within the timeline.

Digital platform used

The process is done through MyTax.

In practice, you may see penalty appearing initially in the system output. But once payment is made within the qualifying period, the penalty is treated as waived.

General comfort on disclosed instruments

Instruments disclosed under the programme are generally not expected to be audited for the same late stamping issue, unless there are signs of fraud or deliberate evasion.

SME Implications

This section is the part most SME bosses care about.

What does this programme mean for your company, your risks, and your workload.

This is not only a finance department issue

Stamp duty exposure is usually created by operational departments, not accounts.

Examples

  • Sales signs distribution agreements, reseller agreements with legal terms.

  • Procurement signs supply agreements and service contracts.

  • HR signs employment related documents and retention arrangements.

  • Operations signs warehouse rental, equipment leasing, and outsourcing agreements.

  • Management signs intragroup funding, shareholder advances, or management fee arrangements.

If there is no central compliance owner, documents get signed and filed, and stamping is missed quietly for years.

So for this programme, you need a company wide approach.

Not just ask accounts to settle. Accounts alone may not even have the documents.

High volume documents can create big penalty exposure

Some SMEs sign many small value instruments.

A simple Non Disclosure Agreement (NDA). A short term service agreement. A renewal letter. A tenancy agreement. A contract addendum.

Each one might look harmless. But if the penalty is applied per instrument, the exposure can jump quickly.

This is why stamp duty risk is often a volume risk, not a value risk.

SMEs with more activity, more vendors, more branches, and more recurring contracts will face higher exposure if they have no system.

Timing is the real challenge, not stamping itself

Many companies assume they can settle everything near the deadline.

In reality, stamp duty clean up involves many steps

  • Collect documents from different departments.

  • Confirm execution dates and signatories.

  • Confirm whether it is an instrument that falls within stamp duty scope.

  • Prepare submission. Upload supporting documents if needed.

  • Wait for adjudication outcome.

  • Make payment.

  • Close the loop and store evidence properly.

If you start late, you risk missing the payment deadline even if you already submitted.

So this programme rewards early movers.

Not everything is covered, so you must screen properly

Documents outside the execution period are not under the programme.

If you mix documents before 2023 with the 2023 to 2025 pool, you will have a different risk profile and potentially different penalty treatment.

So the first screening step is to separate the population by execution date.

Then you focus your disclosure pack based on what qualifies.

This programme is also a governance test

For SMEs, the bigger lesson is this.

If your company cannot produce a proper list of signed instruments within the last three years, you have a governance issue.

Not only stamp duty.

It will also affect your legal risk, contract enforcement, dispute handling, and internal controls.

So many SME owners use this programme as a trigger to improve contract management, not only to fix stamp duty.

KTP’s View

We see this programme as a practical opportunity, but also a warning.

Opportunity, because penalty waiver windows do not come frequently.

Warning, because stamp duty compliance is moving into a more structured enforcement era, and SMEs must adapt.

Why SMEs commonly miss stamp duty

From our field experience, there are five common root causes.

First, no owner. Everyone can sign documents, but nobody owns the stamping process.

Second, wrong beliefs. Many staff think stamp duty is only for lawyers or property.

Third, decentralised signing. Documents are signed in branches or by project teams, and head office never sees the full list.

Fourth, weak filing. Agreements are stored in emails, WhatsApp, or personal folders. When someone resigns, the document disappears.

Fifth, last minute culture. Companies only “care” when they need financing, due diligence, or when someone asks for the stamped copy.

What we advise SMEs to do now

Step 1: Set up a simple internal task force

You do not need a big committee.

You need one person in charge, and one representative from sales, procurement, HR, and operations.

The job is to gather documents and classify them.

Step 2: Build a master register of instruments

Create a list covering 1 January 2023 to 31 December 2025.

  • Minimum fields to capture

  • Document title

  • Counterparty name

  • Execution date

  • Department owner

  • Value or consideration where relevant

  • Whether stamped or not

  • Where the file is stored

This register is your control document. Without it, you will keep missing things.

Step 3: Identify high risk document types first

Do not start with every document.

Start with categories that commonly create stamp duty exposure in SMEs.

  • Service agreements and outsourcing agreements

  • Lease and rental agreements for premises and equipment

  • Intragroup funding arrangements, shareholder advances, and intercompany loan documents

  • Sales and distribution agreements with commitments and obligations

  • Settlement agreements and compensation agreements

This approach gives you faster coverage and better results early.

Step 4: Submit early and plan payment capacity

Many SMEs forget that stamp duty payment is cash outflow.

Even if duty per document is not huge, a big batch can still require budget.

So we advise clients to prepare the cash flow plan and not wait until June 2026.

Step 5: After clean up, build a simple stamping SOP

This is the most important part.

If you only clean up but do not build a system, you will repeat the same issue in 2026, 2027, 2028.

A workable SOP for SMEs can be as simple as this

Every new agreement must be reviewed for stamp duty at the point of signing.

No agreement is considered complete until the stamping status is confirmed.

All stamped instruments must be stored in a central folder with naming rules.

Department heads are accountable for sending signed copies to the central owner within a fixed number of days.

This is basic, but it prevents repeat mistakes.

Call to Action

If your company has been signing agreements actively over the last three years, there is a strong chance some instruments were not stamped.

This does not mean your team is careless.

It usually means you have no system.

And without a system, compliance becomes luck.

KTP can help you in a practical way.

We can perform a stamp duty document health check, help you build the master register, identify which instruments qualify for voluntary disclosure, support submission workflow, and help your team implement a simple stamping SOP so this problem does not come back.

If you want KTP to review your agreement list and guide your voluntary disclosure process before 30 June 2026, reach out to our team.

Past blog on stamp duty

31 Dec 2025 | (TAX UPDATE) Transition from STAMPS Portal to e-Duti Setem | https://www.ktp.com.my/blog/e-duti-setem/31dec2025

22 Dec 2025 | (TAX UPDATE) Stamp Duty Latest Update - e-Duti Setem and Grace Period Without Penalty | https://www.ktp.com.my/blog/e-duti-setem/22dec2025

18 Nov 2025 | (TAX UPDATE) Malaysia’s New Stamp Duty Regulation for November 2026 … What Every SME Owner Must Know | https://www.ktp.com.my/blog/stamp-duty-regulation-2025/18nov2025

14 Oct 2025 | (TAX UPDATE) Stamp Duty Relief for Employment Contracts : A Big Boost in Budget 2026 | https://www.ktp.com.my/blog/stamp-duty-exemption-salary/14oct2025

23 Sept 2025 | (Tax Update) Step-by-Step Guide to Stamping Under the New Stamp Duty Act | https://www.ktp.com.my/blog/can-i-stamp-lhdn-online/24sept2025

15 Aug 2025 | (TAX UPDATE) From Contracts to MOUs … Which Agreements Need Stamp Duty | https://www.ktp.com.my/blog/stamp-duty-agreement-malaysia/15aug2025

7 Jul 2025 | (TAX UPDATE) Frequently Asked Questions (FAQ) : Stamping of Employment Contracts in Malaysia | https://www.ktp.com.my/blog/faq-stamping-of-employment-contracts-in-malaysia/7july2025

18 Jun 2025 | (TAX UPDATE) The Stamp Duty Panic: How I Handled It at KTP | https://www.ktp.com.my/blog/stamp-duty-lhdn/18june2025

13 Jun 2025 | (Tax Update) Malaysia Stamp Duty Overhaul : Self-Assessment and Higher Penalties Part 11 | https://www.ktp.com.my/blog/stamp-act-malaysia-2024-part11/13june2025

6 Jun 2025 | (Tax Update) Malaysia Stamp Duty Overhaul : Self-Assessment and Higher Penalties Part 10 | https://www.ktp.com.my/blog/stamp-act-malaysia-2024-part10/06june2025

6 Jun 2025 | (Tax Update) Malaysia Stamp Duty Overhaul : Self-Assessment and Higher Penalties Part 9 | https://www.ktp.com.my/blog/stamp-act-malaysia-2024-part9/06june2025

3 Jun 2025 | (Tax Update) Malaysia Stamp Duty Overhaul : Self-Assessment and Higher Penalties Part 8 | https://www.ktp.com.my/blog/stamp-act-malaysia-2024-part8/03june2025

29 May 2025 | (Tax Update) Malaysia Stamp Duty Overhaul : Self-Assessment and Higher Penalties Part 7 | https://www.ktp.com.my/blog/stamp-act-malaysia-2024-part7/29may2025

27 May 2025 | (Tax Update) Malaysia Stamp Duty Overhaul : Self-Assessment and Higher Penalties Part 6 | https://www.ktp.com.my/blog/stamp-act-malaysia-2024-part6/27may2025

26 May 2025 | (Tax Update) Malaysia Stamp Duty Overhaul : Self-Assessment and Higher Penalties Part 5 | https://www.ktp.com.my/blog/stamp-act-malaysia-2024-part5/26may2025

21 May 2025 | (Tax Update) Malaysia Stamp Duty Overhaul : Self-Assessment and Higher Penalties Part 4 | https://www.ktp.com.my/blog/stamp-act-malaysia-2024-part4/21may2025

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

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

16 Apr 2025 | (Tax Update) Malaysia Stamp Duty Overhaul : Self-Assessment and Higher Penalties | https://www.ktp.com.my/blog/malaysia-stamp-duty-self-assessment/16apr2025

7 Jul 2021 | Stamp duty for transfer of shares Malaysia | https://www.ktp.com.my/blog/stamp-duty-transfer-shares/07july21

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