What is stamp duty and when does a Malaysian business pay it?
Stamp duty is charged on documents such as property transfers, share transfers, loan or mortgage instruments and leases. Share transfers are RM3 per RM1,000 (0.3%), most loan or charge instruments RM5 per RM1,000 (0.5%) and a simple agreement RM10. From 1 January 2026 employment contracts with wages up to RM3,000 a month are exempt, up from RM300.
Stamp duty is a tax on instruments (documents), charged under the First Schedule to the Stamp Act 1949. The amount depends on the type of document, and the party the law makes liable usually pays.
Common rates (Stamp Act text as at 1 January 2024)
- Transfer of property (Item 32(a)): RM1 per RM100 on the first RM100,000, RM2 on the next RM400,000, RM3 on the next RM500,000 and RM4 above RM1 million, on the higher of price and market value.
- Transfer to a foreign company or a non-citizen who is not a permanent resident (Item 32(aa)): 4% flat.
- Transfer of shares (Item 32(b)): RM3 per RM1,000 (0.3%) on the higher of price and value.
- Loan, charge or mortgage (Item 27): generally RM5 per RM1,000 (0.5%), with lower rates for some loans to SMEs.
- Agreement made under hand (Item 4): RM10.
- Lease of immovable property (Item 49): RM1, RM2 or RM4 per RM250 of annual rent above RM2,400, depending on the term.
Budget 2026 measures (Budget speech, 10 October 2025)
- Employment contracts are exempt up to RM3,000 monthly wages from 1 January 2026, up from RM300.
- The exemption for small-value insurance and takaful policies for individuals and MSMEs is extended for three years.
- The flat duty on residential property transfers to non-citizens and foreign companies rises from 4% to 8% from 1 January 2026, with permanent residents excluded.
- A stamp duty self-assessment system is introduced alongside full e-invoicing in 2026.
Practical points
- An instrument signed in Malaysia must be presented for stamping within 30 days of execution; later stamping carries a penalty (ss.47 and 47A).
Rates and exemptions change by instrument, so confirm with LHDN before relying on a figure.
Legal basis
- Stamp Act 1949, First Schedule, Items 4, 27, 32 and 49
- Stamp Act 1949, ss.47 and 47A
Sources
Applies to 2026 · Last reviewed 29 October 2026
General information for business owners, not legal, tax or professional advice. Rules change, so check the sources or ask a licensed professional before you act.
Related questions
- What personal income tax rates apply to business owners in Malaysia?Resident individuals pay progressive tax from 0% on the first RM5,000 up to 30% on income above RM2 million. Non-residents pay a flat 30%. The rates apply to total chargeable income after reliefs.
- Who must register for sales tax in Malaysia and what are the rates?Sales tax is charged on taxable goods made in Malaysia by registered manufacturers and on taxable imports. Rates are 5%, 10% or a specific rate; since 1 July 2025, goods not listed in the 5% or specific-rate orders are taxed at 10%. A manufacturer must register once taxable sales exceed RM500,000 in 12 months.
- When does my business have to register for service tax in Malaysia, and at what rate?Service tax is charged on listed taxable services at 8%, except 6% for food and beverage, logistics, telecommunications, parking, construction, private healthcare and private education. Registration depends on the service: RM500,000 in 12 months for rental or leasing and financial services, RM1.5 million for food and beverage, construction and private healthcare, and private schools charging over RM60,000 per student a year.
- What changed in service tax from 1 July 2025?From 1 July 2025 Customs extended service tax to rental or leasing (8%), financial services (8%), beauty treatment (8%), construction (6%), private healthcare (6%) and private education (6%), subject to thresholds and exclusions. Sales tax rates changed on the same date, with unlisted goods taxed at 10%.
- How does real property gains tax (RPGT) work in Malaysia?RPGT is charged on gains from disposing of land, buildings and shares in real property companies. Rates fall with the holding period. For Malaysian citizens and PRs it is 30%, 30%, 20%, 15% in years 1 to 5, and nil from the 6th year. Companies pay 10% from year 6.