Stamp duty is a tax on documents, not on income. In Malaysia, many legally binding documents, such as share transfer forms, leases and loan agreements, must be stamped. It is administered by the Inland Revenue Board (LHDN) under the Stamp Act 1949, and is an easily overlooked but essential step in business transactions.
Which common documents attract stamp duty?
- Share transfer forms
- Commercial and residential leases
- Loan, financing and guarantee agreements
- Certain sale and service agreements
How is stamp duty calculated?
Stamp duty falls into two categories: fixed duty and ad valorem duty. For ad valorem documents, the duty is calculated on the transaction amount or the value stated in the document. A share transfer, for example, is charged on the price paid or the value of the shares, whichever is greater. Since 1 January 2026, duty on share transfers is self-assessed: the payer works out and pays it through LHDN's system, instead of waiting for LHDN to assess it. The exact rate and method are subject to the latest LHDN guidance.
What happens if a document isn't stamped in time?
Documents generally must be stamped within a set period after signing, and late stamping can attract penalties. More importantly, an unstamped document may not be admissible as evidence in legal proceedings, which means a shareholders' agreement or share transfer document may be difficult to enforce. So when changing a shareholding structure or signing an important contract, factor stamp duty into your tax planning.
This content is for general reference only and does not constitute legal or tax advice. For your own situation, please book a consultation so that GXY's advisory team can advise on your actual circumstances. Last updated: 20 August 2026.
