Call to simplify stamp duty exemption for older work contracts
MICSEA said the proposal would simplify compliance and reduce paperwork for employers following the IRB's latest frequently asked questions (FAQs) issued on July 3.
"This initiative would encourage more employers to come forward and regularise their documents in an efficient, streamlined manner," MICSEA said in a statement.
The IRB's new FAQ document aims to clarify employers' obligations under the Stamp Act 1949.
Key takeaways include the clarification that employment contracts signed before Jan 1, 2025, and already exempt from stamp duty, may still be submitted for certification, as outlined in Question 15 of the FAQ.
The use of the word "boleh" (may) indicates that submission is optional, providing flexibility for employers.
However, from Jan 1, 2025, onwards, all employment contracts must be stamped, in accordance with subsection 4(1) of the Stamp Act. Question 17 uses the word "hendaklah" (must), affirming that stamping is mandatory for all new contracts going forward.
The FAQ also distinguishes between internship and apprenticeship agreements. In Question 7, the IRB confirms that internship agreements are not required to be stamped, as they do not constitute a formal employer-employee relationship.
MICSEA welcomed this clarification, calling it "crucial and welcomed", especially for companies running internship programmes as a talent pipeline.
"In contrast, apprenticeship agreements do require stamping, as these are considered formal employment relationships governed under the Employment Act 1955," MICSEA said.
MICSEA also urged employers to review the full FAQ and consult experts where needed. The association said it is working with HR consultants and certified training providers to roll out further support and compliance training.
"We remain committed to supporting employers in navigating policy changes while maintaining fair, compliant practices," it added.
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Tax Matters – Non-reviewable contracts: Relief or missed opportunity from SST?
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