In Malaysia, stamp duty is another form of tax levied on a variety of written documents including legal, commercial and financial instruments.
There are 2 types of stamp duty namely:
1. ad valorem stamp duty; and
2. nominal stamp duty.
For ad valorem stamp duty, the amount payable will vary depending on type and value of documents while for nominal stamp duty, the amount payable is fixed at RM10.00.
Below is a non-exhaustive list of stamp duty remission or exemption:
1. transfer of immovable property as a gift between parent and child (note the recipient must be Malaysian citizen): 50% remission on the stamp duty payable by virtue of Stamp Duty (Remission) (No.2) Order 2019, P.U.(A) 369/2019.
2. transfer of immovable property as a gift between husband and wife: 100% exemption under the Stamp Duty (Exemption) (No. 10) Order 2007, P.U.(A) 420/2007.
3. Instrument of transfer: pursuant to Stamp Duty (Exemption) No. 6 Order 2018, P.U.(A) 377/2018, for residential property: effective from 1st January 2019 to 31 December 2020, 100% stamp duty remission if the market value of the residential property is RM300,000.00 or less. By virtue of Stamp Duty (Remission) Order 2019, P.U.(A) 49/2019, effective from 1st July 2019 to 31 December 2020, RM5,000.00 is remitted for instrument of transfer if the market value of the residential property is above RM300,000.00 and not more than RM500,000.00. These is Only applicable to ownership of first residential property by individual who is a Malaysian citizen.
4. Housing loan: pursuant to Stamp Duty (Exemption) (No. 4) Order 2018, P.U.(A) 321/2018 and Stamp Duty (Remission) Order 2018, P.U.(A) 320/2018, 100% exemption for housing loan to finance a home of not more than RM300,000.00 or up to RM1,500.00 remission for housing loan to finance a home of not more than RM500,000.00 respectively. These are only applicable to loan instrument executed by individual who is a Malaysian citizen for the purpose of financing first residential property purchased between 1st January 2019 to 31st December 2020 (for the former) and between 1st July 2019 to 31st December 2020 (for the latter).
5. contract note executed for the sale and purchase transaction of shares of a medium and small capital company in Bursa Malaysia Securities Berhad: pursuant to Stamp Duty (Exemption) Order 2018, P.U.(A) 65/2018, 100% exemption effective from 1st March 2018 to 28th February 2021.
6. service contract: any amount exceeding 0.1% of the value of the contract is remitted by virtue of the Stamp Duty (REMISSION) (No. 4) Order 2010, P.U.(A) 476/2010. The same order also provides that for any subcontract to a stamped main contract, any amount exceeding RM50.00 is remitted.
7. Loan instruments without security: the amount of stamp duty which is in excess of 0.1% is remitted by virtue of Stamp Duty (Remission) (No. 2) Order 2012, P.U.(A) 258/2012.
8. Restructuring of loan: an instrument of loan or a financing agreement relating to the restructuring or rescheduling of a business loan or financing between a borrower or customer and a financial institution which is executed on or after 1 March 2020 but not later than 31 December 2020 is, on application, exempted from stamp duty by virtue of Stamp Duty (Exemption) (No. 2) Order 2020, P.U. (A) 165/2020.
*Updated 24 May 2020
DISCLAIMER: the above information is not a legal advice. You should consult your legal advisor for an appropriate legal advice based on the particular facts before taking any action. The writer shall not be liable or responsible for any lost or damage suffered by any person resulting from use of the above information.
The above opinion is the personel opinion of the writer, not representing the opinion of the employer/organisation of the writer.
Saturday, 27 May 2017
Friday, 10 June 2016
SOCSO: Amendment to the Employees' Social Security Act
Recently, the Parliament has passed an amendment to the Employees' Social Security Act 1969, Employees' Social Security (Amendment) Act 2016, Act A1508 .
The amendment act has came into force on 1st June 2016 (P.U.(B) 261/2016.
Below are the highlights of amendments to the Act from the employer and employee perspectives:
Previously, the Act is only applicable to the employees of the applicable industry who:
1. earn a monthly wages not exceeding RM3,000.00;
2. earn more than RM3,000.00 but his/her first wages is not exceeding RM3,000.00 per month; or
3. earn more than RM3,000.00 in his/her first employment and his/her first employer elects to contribute to the Organisation.
Under the new law, it will cover all employees in the applicable industry by virtue of section 5 of the amendment act. In another words, all employees in the applicable industry regardless of the amount of the salary earned will be subject to the Act. However, for those who earn more than RM4,000.00 per month, the rate of contribution is based on the salary of RM4,000.00.
For ease of reference, I reproduce the amended section 5 of the Act.
5. All employees to be insured
(1) Subject to this Act, all employees in industries to which this Act applies irrespective the amount of wages shall be insured in the manner provided by this Act; and
(2) Notwithstanding subsection (1), if the wages of an employee at any time exceed four thousand ringgit a month, his wages shall for the purposes of this Act be deemed to be four thousand ringgit a month.
The amendment act also inserted a new rate of contributions by employer and employee for monthly wages exceeding RM3,000.00 to RM4,000.00. For those earning RM3,000.00 and below, the rate of contribution remained unchanged.
What is the effect on the rate of contribution to the Organisation?
Let say A (an employee) currently is earning RM5,000.00 per month but his first salary was RM2,500.00. Hence, A's employer is required to contribute to the Organisation on behalf of A.
Based on the previous rate of contribution, A's employer needs to contribute in the sum of RM88.55 being RM51.65 contribution of the first category for Invalidity and Employment Injury and RM36.90 contribution of the second category for the contingency of Employment Injury only.
A only needs to contribute RM14.75 to the Organisation.
Under the new law, A's employer needs to contribute RM118.45 (which is RM29.90 more than the current contribution rate) being RM69.05 and RM49.40 contribution of the first category for Invalidity and Employment Injury and the second category for the contingency of Employment Injury only respectively.
As for A, he is required to contribute in the sum of RM19.75 compared withRM14.75 of the previous rate of contribution.
In return for the increase rate of contribution, A would be entitled to a better disablement benefit or dependants' benefit in the event of unfortunate incident under the amended Schedule 4 of the Act.
Also, the amendment act has introduced a new section 74a which gives power to the Organisation to take over existing company or establish a new company. This blog post will not go into the details of the new section 74a.
DISCLAIMER: the above information is not a legal advice. You should consult your legal advisor for an appropriate legal advice based on the particular facts before taking any action. The writer shall not be liable or responsible for any lost or damage suffered by any person resulting from use of the above information.
The above opinion is the personel opinion of the writer, not representing the opinion of the employer/organisation of the writer.
The amendment act has came into force on 1st June 2016 (P.U.(B) 261/2016.
Below are the highlights of amendments to the Act from the employer and employee perspectives:
Previously, the Act is only applicable to the employees of the applicable industry who:
1. earn a monthly wages not exceeding RM3,000.00;
2. earn more than RM3,000.00 but his/her first wages is not exceeding RM3,000.00 per month; or
3. earn more than RM3,000.00 in his/her first employment and his/her first employer elects to contribute to the Organisation.
Under the new law, it will cover all employees in the applicable industry by virtue of section 5 of the amendment act. In another words, all employees in the applicable industry regardless of the amount of the salary earned will be subject to the Act. However, for those who earn more than RM4,000.00 per month, the rate of contribution is based on the salary of RM4,000.00.
For ease of reference, I reproduce the amended section 5 of the Act.
5. All employees to be insured
(1) Subject to this Act, all employees in industries to which this Act applies irrespective the amount of wages shall be insured in the manner provided by this Act; and
(2) Notwithstanding subsection (1), if the wages of an employee at any time exceed four thousand ringgit a month, his wages shall for the purposes of this Act be deemed to be four thousand ringgit a month.
The amendment act also inserted a new rate of contributions by employer and employee for monthly wages exceeding RM3,000.00 to RM4,000.00. For those earning RM3,000.00 and below, the rate of contribution remained unchanged.
What is the effect on the rate of contribution to the Organisation?
Let say A (an employee) currently is earning RM5,000.00 per month but his first salary was RM2,500.00. Hence, A's employer is required to contribute to the Organisation on behalf of A.
Based on the previous rate of contribution, A's employer needs to contribute in the sum of RM88.55 being RM51.65 contribution of the first category for Invalidity and Employment Injury and RM36.90 contribution of the second category for the contingency of Employment Injury only.
A only needs to contribute RM14.75 to the Organisation.
Under the new law, A's employer needs to contribute RM118.45 (which is RM29.90 more than the current contribution rate) being RM69.05 and RM49.40 contribution of the first category for Invalidity and Employment Injury and the second category for the contingency of Employment Injury only respectively.
As for A, he is required to contribute in the sum of RM19.75 compared withRM14.75 of the previous rate of contribution.
In return for the increase rate of contribution, A would be entitled to a better disablement benefit or dependants' benefit in the event of unfortunate incident under the amended Schedule 4 of the Act.
Also, the amendment act has introduced a new section 74a which gives power to the Organisation to take over existing company or establish a new company. This blog post will not go into the details of the new section 74a.
DISCLAIMER: the above information is not a legal advice. You should consult your legal advisor for an appropriate legal advice based on the particular facts before taking any action. The writer shall not be liable or responsible for any lost or damage suffered by any person resulting from use of the above information.
The above opinion is the personel opinion of the writer, not representing the opinion of the employer/organisation of the writer.
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