Introduction
Malaysia stamp duty relief provides exemptions or reductions on certain transactions to reduce tax burden and encourage restructuring or family property transfers. Governed under the Stamp Act 1949, relief applies to cases such as transfers between family members, REITs, corporate reconstruction, and associated companies.
Stamp Duty Relief for Family Transfers
i. Transfer Between Spouses
- Full 100% exemption under the Stamp Duty (Exemption) (No.10) Order 2007.
- Applies to immovable property transferred voluntarily between husband and wife.
ii. Transfer Between Parent and Child
- 50% remission under the Stamp Duty (Remission) (No.7) Order 2002.
- Beneficiary must be a Malaysian citizen.
Relief for REIT and Corporate Restructuring
i. Transfer to REITs or PTFs
- 100% exemption under the Stamp Duty (Exemption) (No.4) (Amendment) Order 2020.
- Applies to transfers of real property to trustees of approved REITs or PTFs.
ii. Transfer of Assets under Reconstruction or Amalgamation (s.15)
- Companies may apply for 100% exemption on asset or share transfers.
- Conditions:
- Transferee must be a Malaysian company (new or existing with increased capital).
- Acquisition must involve undertakings or at least 90% of issued shares.
- Consideration must be ≥90% in transferee shares.
- Statutory declaration required.
- Transfer instrument executed within 12 months.
| Condition | Explanation |
|---|---|
| Transferee Company | Transferee company is either:
• A new company incorporated in Malaysia, or • An existing Malaysian company which has increased its share capital |
| Objective of Acquisition | Objective of the transferee company is to acquire either:
• The undertakings (i.e. assets & business) of another company (local or foreign), or • At least 90% of the issued share capital of another company (local or foreign) |
| Consideration | Consideration for the acquisition must comprise:
• Undertakings: At least 90% of the total consideration must be in the form of transferee company shares issued to another company. • Share Capital: At least 90% of the total consideration must be in the form of transferee company shares, issued to the shareholders of the other company. |
| Statutory Declaration | A statutory declaration must be made by an advocate and solicitor. |
| Transfer Instrument | The transfer instrument must be executed within 12 months from the:
• Registration date (if the transferee is a newly incorporated company), or • Resolution date to increase the share capital (if the transferee is an existing company which increases its share capital). |
Withdrawal of s.15 Exemption
Exemption may be withdrawn if:
- False declarations are made.
- Conditions are not met.
- Beneficial ownership of shares is not held for at least 3 years (except certain cases).
- Stamp duty with 6% annual interest becomes payable upon withdrawal.
Relief for Associated Companies (s.15A)
- 100% exemption on transfer of assets between associated companies.
- Conditions:
- Companies must be incorporated in Malaysia.
- Transfer improves operational efficiency.
- No part of consideration from non-associated company.
- Companies remain associated for ≥3 years.
- Asset not disposed of within 3 years.
- Advocate & solicitor statutory declaration required.
Definition of Associated Companies
- One company owns ≥90% of another (direct or indirect).
- A third company owns ≥90% of both.
Revocation of s.15A Relief
Relief may be revoked if:
- Non-associated company consideration is involved.
- Asset was previously transferred by a non-associated company.
- Companies cease to be associated within 3 years.
- Transferee disposes of asset within 3 years.
If revoked, duty + 6% annual interest becomes payable.
Key Takeaways
- Family transfers may enjoy 50%–100% relief.
- REIT transfers are fully exempt.
- Corporate reconstructions under s.15 require strict compliance.
- Transfers between associated companies enjoy relief under s.15A.
- Exemptions can be revoked, with penalties and interest.
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