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Stamp duty on contract notes for the trading of listed shares / stocks

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EY Malaysia Tax
18 Apr 2022
Subject Tax alert
Categories Corporate Tax
Jurisdictions Malaysia

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  • Tax Alert Vol. 25 - No. 8_18 April 2022

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Stamp duty on contract notes for the trading of listed shares or stocks

In Budget 2022, the Government proposed to remove the previous RM200 stamp duty cap on contract notes for the trading of listed shares or stocks (see Take 5: Malaysia Budget 2022).

Thereafter, in response to feedback from various parties and to ensure that the local stock market remains dynamic, the Ministry of Finance issued a press release on 30 December 2021 stating that a stamp duty cap for each contract note will be reinstated, albeit at a higher amount of RM1,000. Any amount of stamp duty above RM1,000 will be remitted for the trading of shares or stocks listed on Bursa Malaysia, from 1 January 2022 to 31 December 2026 (see Special Tax Alert No. 1/2022).

To legislate the above, the following Orders were gazetted on 15 April 2022.

  • Stamp Duty (Remission) 2003 (Amendment) Order 2022 [P.U.(A) 111]

The Stamp Duty (Remission) 2003 Order provides that stamp duty payable on all instruments of contract notes relating to the sale of any shares, stock or marketable securities which are listed on the stock market of a stock exchange approved under Section 8(2) of the Securities Industry Act 1983 is remitted. The remission applies to stamp duty that is in excess of RM200 calculated at the prescribed rate in Item 31 of the First Schedule of the Stamp Act 1949 (SA).

The Amendment Order, which is deemed to have come into operation on 1 January 2022, provides that the above-mentioned stamp duty remission will no longer apply to the sale of shares or stocks.

  • Stamp Duty (Remission) Order 2022 [P.U.(A) 112]

The Order provides that stamp duty payable on all instruments of contract notes relating to the sale of any shares or stocks listed on the stock market of a stock exchange approved under Section 8(2) of the Capital Markets and Services Act 2007, which is in excess of RM1,000, calculated at the prescribed rate in Item 31 of the First Schedule of the SA, is remitted.

The Order is deemed to have come into operation on 1 January 2022 and will continue to be in operation until 31 December 2026.

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