Stamp Duty for Employment Contracts

The Inland Revenue Board has issued a press release, clarifying its position on stamp duty treatment for employment contracts ahead of the phased roll-out of the Self-Assessment System for Stamp Duty (STSDS) from 1 January 2026.

The key points are set out below:

What employers should do now:

1. Review all existing employment contracts to identify those signed but never stamped.
2. Stamp contracts finalised in 2025 by 31 December 2025 to enjoy penalty remission.
3. Put procedures in place so that any contract signed on or after 1 January 2026 is stamped within 30 days to avoid penalties.
4. Review other related or ancillary employment documents and establish if they are subject to duty and whether the abovesaid treatment applies.

In view of the upcoming STSDS commencing 1 January 2026, businesses are strongly encouraged to undertake a comprehensive review of all executed instruments, especially those potentially subject to ad valorem stamp duty, and systems should be established to identify, assess, and stamp dutiable instruments on a timely basis moving forward.

Read the full media release here: 

https://www.hasil.gov.my/media/o2rlyqib/20250606_kenyataan-media-hasil_pengecualian-pengenaan-ds-untuk-kontrak-penggajian-yang-dimuktamadkan-sebelum-1-januari-2025.pdf

If you have any questions, please contact our Tax Practice Group.