IRB makes stamping of job contracts mandatory from 2026
PUTRAJAYA: The Inland Revenue Board (IRB) has announced that all employment contracts between employers and employees must be stamped from Jan 1, 2026.
This directive follows the phased implementation of the Stamp Duty Self-Assessment System (STSDS), as outlined in the 2025 Budget.
In a statement today, the IRB said it had begun comprehensive stamp duty audit activities nationwide since January, following the issuance of the Stamp Duty Audit Framework (RKADS).
"Through these audit activities and compliance operations, one of the key findings is that many employment contracts have not been stamped as required under Item 4, First Schedule of the Stamp Act 1949, which stipulates a stamp duty of RM10," the IRB said.
To ease the burden on employers, the Ministry of Finance has agreed to exempt employment contracts executed before Jan 1, 2025, from stamp duty.
This exemption is granted under the powers of the Finance Minister in subsection 80(1A) of the Stamp Act 1949, while the authority to remit late-stamping penalties falls under subsection 47A(2), which empowers the Collector of Stamp Duty.
Employment contracts finalised between Jan 1 and Dec 31, 2025, will still be subject to stamp duty. However, the IRB will grant a remission of late-stamping penalties, provided the contracts are stamped by Dec 31, 2025.
From Jan 1, 2026, all employment contracts must be stamped promptly, as any delays will result in penalties.
In light of these developments, the IRB has urged employers to review and update existing and upcoming contracts to ensure full compliance with the Stamp Act 1949.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Sun
9 hours ago
- The Sun
Samenta heartened by Inland Revenue Board's latest measures on e-invoicing
PETALING JAYA: The Inland Revenue Board's (IRB) decision to exempt micro enterprises from e-invoicing and to give small and medium enterprises more time to comply with the mandate is a positive step that will help ease the current difficulties faced by businesses in the country. The Small and Medium Enterprises Association of Malaysia (Samenta) stated that IRB's exemptions are not only timely but also reflect an understanding of the real challenges faced by small businesses on the ground. 'We have provided input on both issues, and we are grateful that the government has shown genuine care and support for our most vulnerable enterprises,' Samenta national president Datuk William Ng said. 'We are especially heartened by the government's decisive move to permanently exempt businesses earning less than RM500,000 annually from the e-invoicing mandate. 'This exemption spares our smallest traders, hawkers and family-run shops, many operating without digital infrastructure, from compliance burdens that could have forced them to shut down or operate informally,' he added. Ng said the postponement of e-invoicing requirements until Jan 1, 2026, for businesses earning below RM5 million a year provides SMEs with much-needed time to prepare, strengthen their skills and adjust to new demands. This flexibility is essential for SMEs to survive and grow in today's changing economic environment, he added. On Thursday, IRB announced that the e-invoicing implementation for taxpayers with annual income or sales between RM1 million and RM5 million is postponed to Jan 1, 2026, while those below RM500,000 are exempted, and the deadline for those up to RM1 million is extended to July 1, 2026. The board also set a new e-invoicing implementation timeline: Phase 3 for taxpayers with annual income or sales between RM5 million and RM25 million starts on July 1, 2025; Phase 4 for those earning RM1 million to RM5 million begins on Jan 1, 2026; and Phase 5 for taxpayers with income up to RM1 million will commence on July 1, 2026. On the government's decision to postpone the permit requirement for the use of subsidised liquefied petroleum gas, Ng said: 'In response to the concerns of our street-level food operators, the temporary waiver of liquefied petroleum gas permit requirements will go a long way in safeguarding the daily livelihoods of thousands of families and small traders. It may be a small administrative change, but it carries significant implications for business continuity and the cost of living.' Without these timely measures, he said, Malaysia could have faced the potential collapse of thousands of small businesses, particularly those in the micro and informal sectors. Ng pointed out that the government's proactive stance has averted what could have become a national micro-business crisis. 'More importantly, these decisions send a clear message that the government sees SMEs as a central pillar of our economy and is responsive and willing to amend policies based on feedback from the ground,' he said, adding that Malaysia is a country where small businesses are treated with respect and understanding.
Borneo Post
11 hours ago
- Borneo Post
E-invoice delay for SMEs, stamp duty eased for jobs contracts
KOTA KINABALU (June 6): The government has announced key changes to the implementation of the e-invoicing system and the stamping of employment contracts following concerns raised by employers. The Inland Revenue Board (LHDN) announced that the implementation phase for e-invoices for taxpayers with annual income or sales exceeding RM1 million but not exceeding RM5 million has been postponed to Jan 1, 2026. In a statement, LHDN also announced that taxpayers with an annual income or sales below RM500,000 are exempted from the implementation of the e-Invoice system. 'The implementation phase for taxpayers with annual income or sales up to RM1 million has been postponed to July 1, 2026,' LHDN said. The board added that the decision was made after the government recognised the commitments of taxpayers, particularly Micro, Small, and Medium Enterprises (MSMEs), in meeting e-invoice legal requirements, which necessitate adequate preparation time and face numerous implementation challenges. The statement said that, in line with this decision, a new timeline for the e-invoice implementation phases has been established with Phase 3 targeting taxpayers with annual income or sales exceeding RM5 million but not exceeding RM25 million coming into effect on July 1, 2025. LHDN noted that Phase 4 will involve taxpayers with annual incomes or sales exceeding RM1 million up to RM5 million and will begin on Jan 1, 2026 while Phase 5 will cover the income group of up to RM1 million and will commence on July 1, 2026. The previously announced six-month grace period will also apply to these new phases, the agency said. It stressed that during this period, taxpayers will be permitted to issue consolidated e-invoices for all transactions, including self-billed e-invoices. Necessary details, it said, can be included in the 'Product or Service Description' field. 'If there is a request for an e-Invoice from the buyer, the seller is also allowed to issue only a consolidated e-Invoice without issuing one for each transaction,' the statement said. LHDN also said that during this grace period, no prosecution will be initiated under Section 120 of the Income Tax Act 1967 for non-compliance with e-Invoice regulations, provided taxpayers adhere to the consolidated e-Invoice requirements. 'Furthermore, starting Jan 1, 2026, taxpayers involved in e-Invoice implementation must issue an e-Invoice for every sale of goods or provision of services exceeding RM10,000, and consolidated e-Invoicing will no longer be permitted,' the statement added. To ease the burden on employers, the Ministry of Finance has agreed to exempt employment contracts executed before January 1, 2025, from stamp duty obligations. Starting January 1, 2026, all employment contracts between employers and employees must be stamped starting January 1, 2026. This directive is in line with the phased implementation of the Stamp Duty Self-Assessment System (STSDS) as outlined in the 2025 Budget. The IRB said it has already begun comprehensive stamp duty audit activities nationwide since January this year, following the issuance of the Stamp Duty Audit Framework (RKADS). '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,' according to a statement from IRB. This requirement is enforced based on the powers granted to the Minister of Finance 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 Stamp Act 1949. In addition, employment contracts finalised from January 1, 2025, to December 31, 2025, 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 December 31, 2025. This relief is exercised under the powers of the Collector of Stamp Duty under subsection 47A(2) of the Stamp Act 1949. According to the IRB, starting January 1, 2026, employment contracts finalised from that date onwards will be subject to stamp duty, and any delays in stamping will result in penalties being imposed. In light of these developments, the IRB urges all employers to review and update existing and upcoming employment contracts to ensure full compliance with stamping requirements as stipulated under the Stamp Act 1949.
New Straits Times
13 hours ago
- New Straits Times
IRB makes stamping of job contracts mandatory from 2026
PUTRAJAYA: The Inland Revenue Board (IRB) has announced that all employment contracts between employers and employees must be stamped from Jan 1, 2026. This directive follows the phased implementation of the Stamp Duty Self-Assessment System (STSDS), as outlined in the 2025 Budget. In a statement today, the IRB said it had begun comprehensive stamp duty audit activities nationwide since January, following the issuance of the Stamp Duty Audit Framework (RKADS). "Through these audit activities and compliance operations, one of the key findings is that many employment contracts have not been stamped as required under Item 4, First Schedule of the Stamp Act 1949, which stipulates a stamp duty of RM10," the IRB said. To ease the burden on employers, the Ministry of Finance has agreed to exempt employment contracts executed before Jan 1, 2025, from stamp duty. This exemption is granted under the powers of the Finance Minister in subsection 80(1A) of the Stamp Act 1949, while the authority to remit late-stamping penalties falls under subsection 47A(2), which empowers the Collector of Stamp Duty. Employment contracts finalised between Jan 1 and Dec 31, 2025, will still be subject to stamp duty. However, the IRB will grant a remission of late-stamping penalties, provided the contracts are stamped by Dec 31, 2025. From Jan 1, 2026, all employment contracts must be stamped promptly, as any delays will result in penalties. In light of these developments, the IRB has urged employers to review and update existing and upcoming contracts to ensure full compliance with the Stamp Act 1949.
