The Inland Revenue Board of Malaysia (HASiL) has clarified the stamp duty treatment and endorsement requirements for employment contracts and instruments that qualify for exemptions under the Stamp Act 1949.
In a statement, IRB said the clarification covers the stamp duty treatment and submission for endorsement of employment contracts, as well as instruments listed under the Exemption and General Exemption categories in the First Schedule of the Stamp Act 1949.
Under the revised clarification, all instruments listed under the Exemption category, including employment contracts involving monthly salaries of RM3,000 or below, are not required to be stamped or endorsed.
However, HASiL said all instruments falling under the General Exemption category, which are exempted under Section 35 of the Stamp Act 1949, must still be submitted for endorsement.
The endorsement process is necessary to ensure that only eligible parties and qualifying instruments are granted stamp duty exemptions.
For employment contracts where the employee’s monthly remuneration exceeds RM3,000, HASiL said only the principal employment agreement, or master contract containing the terms and conditions of employment between the employer and employee, is required to be stamped and endorsed.
Any ancillary or supplementary documents relating to the same employment arrangement will not require stamping or endorsement.
According to IRB the clarification is intended to provide greater certainty, consistency and uniformity in the administration of stamp duty while making it easier for taxpayers to comply with the Stamp Act 1949.
The agency said the move is expected to streamline implementation and reduce uncertainty surrounding the stamp duty treatment of employment-related documents and other exempt instruments.
