Stamp Duty Instrument (PEN Form) Malaysia

A Stamp Duty Instrument (PEN Form) in Malaysia records the information the relevant body requires to process the matter.

The Stamp Act 1949 (Act 378) establishes the framework for stamp duty in Malaysia. The First Schedule to the Stamp Act 1949 sets out the categories of chargeable instruments and the applicable ad valorem or fixed duty rates. Major categories include: conveyances on sale of property (Item 32(a) — ad valorem duty on the property consideration or market value, whichever is higher); loan or financing agreements secured on property (Item 27 — duty on the principal loan amount); tenancy agreements (Item 1 — fixed or graduated duty based on rent and term); share transfer instruments (Item 32(b)); and partnership and company documents.

Stamp duty rates on property conveyances in Malaysia are graduated under Item 32(a) of the First Schedule to the Stamp Act 1949: 1% on the first RM 100,000 of consideration; 2% on the next RM 400,000 (i.e., RM 100,001 to RM 500,000); 3% on amounts from RM 500,001 to RM 1,000,000; and 4% on amounts exceeding RM 1,000,000. For properties priced below RM 500,000, the Pindaan Kadar Duti Setem 2019 (Stamp Duty Amendment 2019) introduced a 0% rate on the first RM 300,000 of consideration as part of the Home Ownership Campaign (HOC) — though this exemption has varied from year to year under budget amendments.

Loan agreement stamp duty under Item 27 of the First Schedule applies at a flat rate of 0.5% on the principal loan amount secured by the property. For a housing loan of RM 600,000, the stamp duty on the loan agreement is RM 3,000. The Memorandum of Transfer (MOT) filed with the Land Office under the National Land Code 1965 (Act 56) triggers the ad valorem conveyance stamp duty, while the Sale and Purchase Agreement (SPA) executed by the parties and the loan agreement each require separate stamping.

Stamping of instruments in Malaysia is done electronically through LHDN's Stamp Assessment and Payment System (STAMPS) portal (stamps.hasil.gov.my), which replaced the manual stamping process. Solicitors and licensed conveyancers generate the stamp duty assessment online, pay via online banking or LHDN counter, and receive a digital stamp certificate. Physical stamping at LHDN Stamp Duty counters remains available for instruments not covered by the STAMPS online system. Instruments not stamped within the prescribed period — 30 days from execution for instruments executed in Malaysia, 30 days from receipt in Malaysia for instruments executed outside Malaysia — attract late stamping penalties under Section 47A of the Stamp Act 1949.

A Stamp Duty Instrument (Borang PEN) is required whenever a chargeable instrument under the Stamp Act 1949 (Act 378) is executed in Malaysia and must be presented to LHDN for stamping.

A Stamp Duty Instrument is required when a Sale and Purchase Agreement (SPA) for real property in Malaysia is signed by both parties. The SPA must be stamped with ad valorem duty under Item 32(a) of the First Schedule to the Stamp Act 1949 based on the property's purchase price or market value (whichever is higher). The Memorandum of Transfer (MOT/Form 14A under the National Land Code 1965) filed with the Land Office also requires separate ad valorem stamping.

A Stamp Duty Instrument is needed when a housing loan agreement or commercial financing agreement secured on Malaysian property is executed between a borrower and a financial institution. The loan agreement attracts stamp duty at 0.5% of the principal loan amount under Item 27 of the First Schedule to the Stamp Act 1949, and must be stamped within 30 days of execution.

A Stamp Duty Instrument is required when a tenancy agreement for premises in Malaysia is executed. Tenancy agreements attract graduated stamp duty under Item 1 of the First Schedule based on the annual rent and the term of the tenancy. A tenancy agreement of 1 year or less attracts RM 1 for every RM 250 of annual rent; tenancies of 1–3 years attract RM 2 for every RM 250; and tenancies exceeding 3 years attract RM 4 for every RM 250 of annual rent.

A Stamp Duty Instrument is needed when shares in a Malaysian company are transferred between parties. Share transfer instruments attract ad valorem duty under Item 32(b) of the First Schedule at RM 3 per RM 1,000 of the consideration or par value (whichever is higher). The share transfer instrument (Form 32A under the Companies Act 2016) and the share certificate must both be stamped.

A Stamp Duty Instrument is required when a deed of assignment, deed of gift, or instrument of transfer of property is executed outside a conventional SPA — for example, where a property developer assigns strata title rights, or where a court-ordered property transfer under the Law Reform (Marriage and Divorce) Act 1976 is required to be stamped. Even where a stamp duty exemption or remission applies, the instrument must still be presented to LHDN for adjudication and endorsement of the exemption.

A complete Stamp Duty Instrument (Borang PEN) for Malaysia must contain the following essential elements.

Instrument Details: The type of instrument being stamped must be clearly identified — Sale and Purchase Agreement, Memorandum of Transfer, loan agreement, tenancy agreement, share transfer instrument, deed of assignment, or deed of gift. The instrument date, the parties' names and NRIC or SSM registration numbers, and the LHDN Stamp Reference number (generated by the STAMPS portal) must be stated.

Property or Asset Description: For property instruments, the full address, title number, lot number, title type (Geran, Pajakan, Mukim), area, and state of the property must be stated. For share transfer instruments, the company name, SSM registration number, number of shares, and par value per share must be stated.

Consideration or Principal Amount: The transaction consideration (SPA price or market value, whichever is higher) for conveyances, the principal loan amount for loan agreements, the annual rent for tenancy agreements, or the share transfer consideration must be stated accurately, as these form the basis for the ad valorem stamp duty calculation.

Stamp Duty Computation: The applicable duty rate under the First Schedule to the Stamp Act 1949 and the computed duty amount must be stated. For conveyances, the graduated rate table (1%/2%/3%/4%) is applied to the consideration in the relevant bands. Any exemption or remission under a specific Stamp Duty Exemption Order must be declared with its legal basis.

Stamp Duty Exemption Declaration: Where any exemption applies — for example, the Home Ownership Campaign (HOC) exemption, the instrument executed for first-time homebuyers under the Finance Act 2019 or 2020, a spousal transfer exemption, or a family company restructuring exemption — the relevant Exemption Order and conditions must be declared. LHDN will endorse the exemption on the instrument.

Late Stamping Penalty Acknowledgement: If the instrument is presented for stamping after the 30-day prescribed period under Section 47A of the Stamp Act 1949, the applicable late penalty — RM 25 for the first month, 5% of duty thereafter (minimum RM 25) — must be included in the payment. Voluntary disclosure of late stamping generally results in reduced penalties.

Solicitor / Authorised Agent Details: The name, Bar Council or licensed conveyancer registration number, firm address, and contact details of the solicitor or authorised agent submitting the instrument for stamping must be stated. Only Advocates and Solicitors enrolled with the Bar Council of Malaysia (Peninsular Malaysia) or the relevant Sabah or Sarawak Bar, or licensed conveyancers, may prepare instruments of transfer and present instruments for stamping on behalf of clients.

Additional compliance elements for a Stamp Duty Instrument (PEN Form) Malaysia used in Malaysia include: Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Forms-legal.com provides this template as a starting point for Malaysia-compliant documentation.