All job contracts must be stamped from next year, says LHDN
PUTRAJAYA: The Inland Revenue Board (LHDN) has announced that all employment contracts between employers and employees must be stamped with effect from Jan 1 next year.
This directive is in line with the phased implementation of the Stamp Duty Self-Assessment System as outlined in Budget 2025, it said in a statement on Friday (June 6).
ALSO READ: 'Stamp duty for job contracts another burden for businesses'
LHDN said comprehensive stamp duty audit activities had already been conducted nationwide since January this year, following the issuance of the Stamp Duty Audit Framework.
"Through the audit activities and compliance operations, one of the key findings has been that many employment contract documents between employers and employees have not been stamped as required under Item 4, First Schedule of the Stamp Act 1949, where the stamp duty is set at RM10," the statement read.
It said that to ease the burden on employers, the Finance Ministry has agreed to exempt employment contracts executed before Jan 1 this year from stamp duty obligations.
ALSO READ: Job contracts stamping rule could hurt SMEs
This requirement is enforced based on the powers granted to the Finance Minister under subsection 80(1A) of the Stamp Act 1949 and the authority to remit late stamping penalties provided to the Collector of Stamp Duty under subsection 47A(2) of the same Act.
In addition, employment contracts finalised from Jan 1 to Dec 31 this year will be subject to stamp duty.
However, a remission of late stamping penalties will be granted, provided that the employment contracts are stamped on or before Dec 31, under the powers of the Collector under subsection 47A(2) of the Act.
ALSO READ: Stamp duty on employment contracts burdens businesses, says association
According to LHDN, employment contracts finalised from Jan 1 next year will be subject to stamp duty, and any delays in stamping will result in penalties being imposed.
It urged all employers to review and update existing and upcoming employment contracts to ensure full compliance with stamping requirements as stipulated under the Act. – Bernama
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