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Stamp duty exemption
Stamp duty exemption for micro enterprises or small and medium enterprises (MSMEs) on instruments for peer-to-peer (P2P) financing
In Budget 2022, it was proposed that a stamp duty exemption be given on P2P loans or financing agreements executed between MSMEs and their investors from 1 January 2022 to 31 December 2026 (see Take 5: Malaysia Budget 2022).
To legislate the above proposal, the Stamp Duty (Exemption) (No. 17) Order 2021 [P.U.(A) 487] was gazetted on 28 December 2021. The Order provides a stamp duty exemption for the instrument of investment notes or Islamic investment notes for P2P financing executed by MSMEs, or between MSMEs and their investor or a person authorized to act on behalf of the investor.
The exemption is given on condition that:
(a) The P2P platform is operated by a P2P operator registered with the Securities Commission Malaysia (SC), and
(b) The investment note or Islamic investment note is executed between 1 January 2022 and 31 December 2026
The following terms have been defined in the Order:
i. MSMEs
MSMEs as may be determined by the National Entrepreneur and Small and Medium Enterprises Development Council established under Section 2A of the Small and Medium Industries Development Corporation Act 1995
ii. P2P platform
Electronic platform that facilitates directly or indirectly the issuance, execution or offering of an investment note or an Islamic investment note specified in the Guidelines on Recognized Markets issued or revised from time to time by the SC
iii. Investment note or Islamic investment note
Has the same meaning assigned to it under the Capital Markets and Services (Prescription of Securities and Islamic Securities) (Investment Note and Islamic Investment Note) Order 2016
The Order came into operation on 1 January 2022.
Stamp duty exemption for small and medium enterprises (SMEs) on any instrument executed for mergers and acquisitions (M&A)
In Budget 2022, the Government proposed to extend the waiver of the stamp duty on any instrument executed by SMEs for M&A (see Take 5: Malaysia Budget 2022).
To legislate the above proposal, the Stamp Duty (Exemption) (No. 18) Order 2021 [P.U.(A) 502] was gazetted on 31 December 2021. The Order provides a stamp duty exemption for the instruments outlined below, in relation to an approved M&A executed by SMEs:
- Contract or agreement for the sale or lease of property (land, building, machinery and equipment)
- Instrument of transfer and memorandum of understanding
- Loan or financing agreement
- First leasing agreement
The exemption will apply to instruments executed between 1 July 2021 and 31 December 2022. However, the exemption is also subject to the condition that the application for M&A is received by the MEDAC between 1 July 2021 and 30 June 2022.
The Order is deemed to have come into operation on 1 July 2021.