Internship agreements not subject to stamp duty, MICSEA confirms

Borneo Post

10 hours ago

Lai says the clarification is both timely and essential, particularly for employers seeking to comply with legal requirements without unnecessary confusion. — Bernama photo
KUCHING (July 5): Internship agreements are not required to be stamped as they do not constitute a formal employer-employee relationship, said the Malaysian Industrial and Commercial Employers Association (MICSEA), citing clarifications from the Inland Revenue Board (LHDN) FAQs.
MICSEA president YK Lai said the clarification is both timely and essential, particularly for employers seeking to comply with legal requirements without unnecessary confusion.
'This clarification is crucial and welcomed, as it ensures that companies can continue to offer internships without administrative hurdles or added cost implications,' he said in a statement.
'With this, many employers can now confidently enhance their internship programmes without fear of non-compliance. It also ensures that internship opportunities will not be disrupted or deterred, supporting the government's initiative to prepare students to be industry-ready upon graduation.'
He added that many companies view internship programmes as an important talent pipeline, and the assurance provided will allow them to contribute meaningfully to graduate employability and real-world exposure.
In contrast, Lai said apprenticeship agreements do require stamping as they are considered formal employment relationships governed under the Employment Act 1955.
He added that employment contracts that have been exempted may obtain a stamp duty exemption certificate.
'This implies that submission is optional, offering flexibility to employers with exempted pre-2025 contracts.'
He further noted that employment contracts sealed from 2025 onward must be submitted to LHDN for stamping in accordance with subsection 4(1) of the Stamp Act 1949.
To further promote voluntary compliance and ease the process, Lai proposed that LHDN allow for a one-time bulk submission of all employment contracts signed before Jan 1, 2025 to obtain the stamp duty exemption certificate.
'This initiative would encourage more employers to come forward and regularise their documents in an efficient, streamlined manner,' he said.
He also called on all employers to review the full FAQs for better understanding and continue consulting with relevant experts where needed.
'MICSEA is working closely with all its members together with HR Edge Consulting Sdn Bhd (HRedge) and will issue further guidance to support smooth implementation via training with MyFreelys Academy, a certified HRDCorp Training Provider.
'We remain committed to supporting employers in navigating policy changes while maintaining fair, compliant practices,' added Lai. employment internship LHDN MICSEA stamp duty