STAMP duty is no longer in hibernation. Since 2025, the Inland Revenue Board (IRB) has significantly intensified stamp duty audits, turning enforcement into an avalanche.
Against this backdrop IRB should be commended for introducing the Special Voluntary Disclosure Programme (SVDP) in 2026, which offers a full waiver of penalties under Section 47A of the Stamp Act 1949 and encourages voluntary compliance.
Ordinarily, late stamping attracts penalties under Section 47A, which increase with the length of delay. The stamping deadline is 30 days from signing if executed in Malaysia, or 30 days from receipt in Malaysia if executed overseas.
Where stamping is done within three months after the deadline, the penalty is RM50 or 10% of the duty undercharged, whichever is higher. If done after three months, the penalty increases to RM100 or 20% of the duty undercharged, whichever is higher.
What is being offered?
Under SVDP, which runs for six months from Jan 1, the taxpayers are allowed to voluntarily disclose and stamp all instruments that were executed between Jan 1 2023 and Dec 31 2025, with no late stamping penalties imposed, provided the relevant stamp duty is paid within the programme period.
Importantly, the penalty waiver is automatic. No separate appeal or remission application is required. Once the instrument is stamped and the duty paid within the SVDP period, the penalty will be waived.
Why this matters now
Over the years, many businesses and individuals may have accumulated unstamped documents. Common examples include tenancy agreements, service contracts, share transfer forms, internal restructuring documents, intercompany agreements, etc.
In many cases, the documents were executed but never stamped due to oversight, misunderstanding of stamp duty rules or the assumption that stamping could be dealt with later. With increased digitisation and data matching by IRB, such assumptions are misguided.
The SVDP offers a rare opportunity to regularise historical non-compliance at a reduced cost. Documents executed between Jan 1 2023 and Dec 31 2025 and stamped during the SVDP period will also not be audited, providing added certainty for participating taxpayers.
Exceptions
That said, the programme is not a blanket amnesty.
Under the SVDP, the penalty waiver does not apply in cases involving fraud or deliberate concealment. In addition, instruments that are not disclosed during the SVDP period will continue to be subject to normal enforcement, audits and penalties under the Stamp Act.
Outside the SVDP period, the stamp duty audit framework issued in January 2025 still allows for voluntary disclosure, subject to a reduced penalty of RM50 or 10% of the stamp duty undercharged, whichever is higher.
Practical considerations for taxpayers
Given the limited timeframe, taxpayers should begin preparations early by reviewing documents from the past three years, identifying unstamped instruments and assessing stamp duty exposure.
For businesses, this may require coordination across legal, finance and operational teams. Sufficient time should also be allowed for IRB to issue assessments so that payment can be completed within the SVDP period. Leaving disclosures to the final months increases the risk of delays and loss of the penalty waiver.
Unanswered questions
Taxpayers should be encouraged to participate in voluntary disclosures. However, clarity and certainty are needed.
Serious questions remain for IRB. As the five-year time limit only takes effect from Jan 1 2026, it appears that until Dec 31 2025 there is no time limit. This suggests IRB may reopen past assessments without restriction, including cases dating back to 2009 where assessments were previously raised but later found to be erroneous.
If this is the case, what happens to instruments signed before the SVDP period? Are taxpayers exposed to stamp duty and penalties for documents executed prior to Jan 1 2023?
Another critical question remains: where is the legislative provision in the Stamp Act for raising assessments on unstamped instruments prior to Jan 1 2026?
This article is contributed by Thannees Tax Consulting Services Sdn Bhd managing director SM Thanneermalai (www.thannees.com).
