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Stamp Duty Remission Order for Contract Notes Gazetted

13 July 2023

On 19 June 2023, the Prime Minister and Minister of Finance of Malaysia, Dato’ Seri Anwar bin Ibrahim, announced several measures to boost the Malaysian capital markets, one of which was the reduction in the rate of stamp duty on contract notes relating to the trading of listed shares on Bursa Malaysia from 0.15% to 0.10% while at the same time, maintaining the maximum stamp duty of RM1,000 per contract note.1
 
The Stamp Duty (Remission) (No. 3) Order 2023 [P.U.(A) 208/2023] (“Remission Order No. 3”) was gazetted yesterday to give effect to the above measure announced by Dato’ Seri Anwar bin Ibrahim.
 
Remission Order No. 3 remits the stamp duty payable under item 31(a) (“item 31(a)”) of the First Schedule to the Stamp Act 1949 (“the Act”) in respect of any contract note for the sale of any shares or stock which are listed on the stock market of a stock exchange approved under section 8(2) of the Capital Markets and Services Act 2007, i.e. Bursa Malaysia Securities Berhad (“Bursa Malaysia”), which:
 
  1. is in excess of 0.1% of the stamp duty payable; and

  2. any further stamp duty payable after the remission under paragraph (a) above which is in excess of RM1,000.
The remission of stamp duty under Remission Order No. 3 only applies to contract notes executed on or after 13 July 2023 but not later than 12 July 2028.
 
Without the remission under Remission Order No. 3, stamp duty is payable under item 31(a) on a contract note for the sale of shares or stock listed on Bursa Malaysia at a rate of 0.15% of the value of the shares or stock. The stamp duty payable under item 31(a) was capped at RM1,000 under the Stamp Duty (Remission) Order 2022 [P.U.(A) 112/2022] (“Remission Order 2022”) for the period from 1 January 2022 to 31 December 2026.
 
It should be noted that Remission Order No. 3 only applies to contract notes for the sale of shares or stock listed on Bursa Malaysia. It does not apply to contract notes in respect of the sale of shares or stock that are not listed on Bursa Malaysia, or the sale of other listed marketable securities2, such as debt instruments and warrants. For such marketable securities, stamp duty is payable on the contract note under item 31(b) of the First Schedule to the Act. Although the rate of stamp duty under item 31(b) is 0.1% of the value of the marketable security, the maximum stamp duty of RM1,000 under Remission Order No. 3 does not apply.
 
Remission Order 2022 is revoked by Remission Order No. 3.
 
Alert by Phua Pao Yii (Partner) and Tan Wei Liang (Senior Associate) of the Corporate Practice of Skrine.
 
1 Our Alert on the measures announced in mid-June 2023 to boost the Malaysian capital markets can be accessed here.
2 The Act defines a “marketable security” as a security of such a description as to be capable of being sold or negotiated in any stock market in Malaysia or elsewhere.

This alert contains general information only. It does not constitute legal advice nor an expression of legal opinion and should not be relied upon as such. For further information, kindly contact skrine@skrine.com.

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