Good news for businesses that have yet to regularise their stamp duty matters.
The Inland Revenue Board of Malaysia (LHDN) has extended the Special Voluntary Disclosure Programme (Program Khas Pengakuan Sukarela – PKPS) for Stamp Duty until 31 December 2026. The extension provides businesses and individuals with additional time to review their documents, make voluntary disclosures, and rectify any outstanding stamp duty obligations before the programme ends.
If your business has entered into agreements or executed legal documents that may be subject to stamp duty, now is the ideal time to review your records and ensure everything is in order.
What Is the Special Voluntary Disclosure Programme (PKPS)?
The Special Voluntary Disclosure Programme (PKPS) is an initiative introduced by LHDN to encourage taxpayers to voluntarily disclose documents that have not been stamped or that may have been insufficiently stamped.
Rather than waiting for a compliance review or audit, businesses can take proactive steps to regularise their stamp duty matters within the programme period.
This initiative promotes voluntary compliance while helping businesses minimise future compliance risks.
What Is Stamp Duty?
Stamp duty is a tax imposed on certain legal instruments and documents executed in Malaysia. Depending on the nature of the transaction, stamp duty may apply to various agreements used in day-to-day business operations.
Some common documents that may attract stamp duty include:
- Tenancy and lease agreements
- Loan and financing agreements
- Share transfer forms
- Service agreements
- Sales and purchase agreements
- Hire purchase agreements
- Business contracts and other legal instruments
As stamp duty obligations vary depending on the document and transaction, businesses should review their agreements carefully to determine whether stamping is required.
Why Should Businesses Take Advantage of the Extension?
The extension until 31 December 2026 gives businesses valuable time to review historical documents and address any outstanding matters.
Making a voluntary disclosure before enforcement action can help businesses:
- Improve overall tax compliance.
- Ensure legal documents are properly stamped.
- Reduce the risk of future disputes.
- Strengthen internal record management.
- Prepare for future tax or compliance reviews.
Being proactive also demonstrates good corporate governance and sound financial management.
Documents Worth Reviewing
Businesses should consider reviewing documents executed over previous years to ensure stamp duty requirements have been met.
Areas to review may include:
- Employment-related agreements.
- Rental and tenancy agreements.
- Financing and loan documentation.
- Shareholder agreements.
- Commercial contracts.
- Business acquisition documents.
- Property-related agreements.
Maintaining a complete record of stamped documents is equally important for future reference and audit purposes.
Common Mistakes Businesses Make
Many businesses overlook stamp duty requirements because the focus is often placed on accounting and income tax compliance.
Some common issues include:
I. Assuming All Agreements Are Automatically Exempt
Not every agreement is exempt from stamp duty. Businesses should review each document based on its nature and purpose.
II. Late Stamping of Documents
Delaying the stamping of documents may lead to additional compliance issues and administrative complications.
III. Poor Document Management
Misplaced agreements or incomplete documentation can make it difficult to determine whether stamp duty obligations have been fulfilled.
IV. Failing to Review Older Agreements
Businesses often focus only on current-year transactions while overlooking agreements executed in previous years that may still require attention.
How Can Businesses Prepare?
To make the most of the extension period, businesses should consider taking the following steps:
✔ Conduct a review of existing agreements and legal documents.
✔ Verify whether stamp duty has been properly accounted for.
✔ Organise supporting documents for easy reference.
✔ Maintain proper records of stamped instruments.
✔ Seek professional advice if unsure whether a document is subject to stamp duty.
Early preparation allows businesses to address any issues before the programme concludes.
Benefits of Staying Compliant
Maintaining proper stamp duty compliance offers more than just meeting statutory requirements.
It also helps businesses:
- Improve corporate governance.
- Reduce compliance risks.
- Facilitate smoother audits and due diligence exercises.
- Enhance confidence when dealing with financial institutions and business partners.
- Maintain complete and reliable legal documentation.
Good compliance practices contribute to stronger business operations and reduce unexpected issues in the future.
Our team can assist your business in reviewing agreements, identifying documents that may be subject to stamp duty, and providing guidance on compliance with Malaysian stamp duty requirements.
If you are preparing for an audit, tax review, or simply wish to ensure your records are complete, feel free to contact us. We are here to help your business stay compliant and well-prepared.