Starting 1 January 2026, Malaysia will implement a Stamp Duty Self-Assessment System (SDSAS), marking a shift from an LHDN-issued assessment process to a self-reporting compliance model.
Under this system, taxpayers will be required to assess, declare and pay stamp duty themselves through the MyTax Portal, shifting responsibility for stamp duty calculations from LHDN to the duty payer.
Furthermore, the current model will be discontinued in phases, as stamping will be carried out via the e-Duti Setem module on MyTax Portal instead of STAMPS.
SDSAS three-phase rollout
The new system will not apply to all documents at once, and implementation will be phased as follows:
| Phase | Effective Date | Types of Instruments Covered |
| Phase 1 | 1 January 2026 | Tenancy and lease agreements General chargeable instruments Securities |
| Phase 2 | 1 January 2027 | Instruments involving transfer of property ownership (e.g. sale and purchase of real property) |
| Phase 3 | 1 January 2028 | All other chargeable instruments |
6 key stamp duty updates
Taxpayers now responsible for calculation
Under the SDSAS, the responsibility for stamp duty calculations now rests with the taxpayer. Once a stamp duty return is filed and payment is made via MyTax, it is deemed to be the assessment, and the accuracy of stamp duty calculations rests with the taxpayer.
Penalty waiver
To ease the transition, no penalties will be imposed in 2026 where errors arise in good faith (e.g., incorrect duty declaration or information).
However, this concession is temporary. From 2027 onwards, penalties will apply.
Higher duties for foreign residential property
Residential property purchases by foreigners are now subject to a flat 8% stamp duty, instead of the previous rate of 4%.
Expanded employment contract exemptions
Previously, only contracts with monthly wages of RM300 or less were exempt from stamp duty.
This exemption threshold is significantly raised to RM3,000 per month, extending the scope of exempt employment agreements executed on or after 1 January 2026.
Expanded penalties and enforcement
Alongside self-assessment, the Stamp Act 1949 introduce stronger enforcement measures, including:
- new offences for failure to file returns or under-assessment
- penalties of up to 100% of the duty undercharged where there is intentional underpayment
- higher fines for unstamped instruments or improper disclosure
In practice, this means mistakes in stamping, whether accidental or otherwise, are more likely to be picked up later, and businesses can no longer rely on LHDN assessments as a safety net.
New time limit for refunds on certain sale agreements
Sale agreements are often treated as if they were a completed sale (conveyance of equitable interests or certain assets such as goodwill or book debts) and ad valorem stamp duty is then paid.
Under the revised rules, if such an agreement is later cancelled, rescinded, or not substantially carried out, any application for a refund of stamp duty must now be made within 24 months from the date the agreement.
Collector’s enhanced powers
Amendments also expand the Collector’s authority to:
- Issue binding interpretative guidelines
- use overpaid stamp duty to offset other tax liabilities (e.g., income tax, real property gains tax)
- re-open assessments in circumstances involving fraud, negligence, or material mistakes without limit in time
This broader enforcement framework underscores the importance of meticulous compliance under SDAS.
Final thoughts
As ELP regularly assists with drafting instruments subject to stamp duty such as employment contracts and loan agreements, the transition to a self-assessment model requires a thorough understanding of obligations so we may better advise on relevant obligations, exemptions, and compliance under the new SDSAS framework.
Meanwhile, for businesses and employers in Malaysia who regularly enter into instruments subject to stamp duty, now is the time to conduct a compliance health check and align internal policies with the new requirements.
