Updated guidelines Sections 15 and 15A of the Stamp Act 1949

Updated guidelines on relief from stamp duty pursuant to Sections 15 and 15A of the Stamp Act 1949 (SA)

The IRB has published on its website updated Guidelines, in Bahasa Malaysia, on the application for relief from stamp duty under Sections 15 and 15A of the SA, as follows:

• Garis Panduan Permohonan Pelepasan Duti Setem Di Bawah Seksyen 15, Akta Setem 1949                                                                                                                                                                                                                                              
• Garis Panduan Permohonan Pelepasan Duti Setem Di Bawah Seksyen 15A, Akta Setem 1949

The Guidelines are dated 1 March 2022 and replace the earlier Guidelines which were published on 26 February 2019 (see Tax Alert No. 5/2019). 

Garis Panduan Permohonan Pelepasan Duti Setem Di Bawah Seksyen 15, Akta Setem 1949

Section 15 of the SA provides relief from stamp duty in cases of reconstructions or amalgamations of companies.

Some of the key changes to the Guidelines are:

• The new Guidelines specify more clearly the documents to be furnished by the “transferee company” and “existing company” respectively, in support of the application. In addition, certain supporting documents (e.g., Constitution of the Company, Board resolution on the increase in share capital etc.) are to be certified by a Company Secretary (the previous Guidelines stated that the documents were to be certified by the Deputy Collector of Stamp Duty).                                                                                                                                                                                                            
• The new Guidelines clarify that applicants will be notified of the result of their applications via the Stamp Duty Assessment and Payment System (STAMPS). For approved applications, the applicant will need to collect the approval letter and certificate of exemption from the relevant State Director’s Office.                                                                                                                                                                                                              
  
• The new Guidelines stipulate that in the event the exemption is revoked, a late payment penalty under Section 47A of the SA may be imposed.                                                               
  
• The new Guidelines explain the responsibilities of the parties involved where approval for the stamp duty exemption has been granted.
  

Section 15A of the SA provides relief from stamp duty in cases of transfer of property between associated companies, as defined.

Some of the key changes to the Guidelines are as outlined below:

•  The new Guidelines state that generally, transactions such as the transfer of shares, real property and company assets (previously, only shares and real property) would qualify for relief.                                                                                                                                                                                                         
• The new Guidelines reiterate that the Section 15A stamp duty relief would not apply on the transfer of business.                                                                                                                                                                                   
• The new Guidelines provide an updated list of documents to be furnished in the application for the exemption. In addition, certain supporting documents (e.g., Board resolution for the transfer between the associated companies) are to be certified by a Company Secretary (previously, the Deputy Collector of Stamp Duty).                                                                                                                                                                                                        
  
• The new Guidelines stipulate that the property transferred must be transferred directly from the transferor to the transferee.                                                                                                                                            
• The new Guidelines stipulate that in the event the exemption is revoked, a late payment penalty under Section 47A of the SA may be imposed.                                                                    
  
• The new Guidelines explain the responsibilities of the parties involved where approval for the stamp duty exemption has been granted.