THE Stamp Duty Special Voluntary Declaration Programme (SVDP), which commenced on Jan 1 this year, is scheduled to end on June 30.
One of its key benefits is the waiver of penalties on overdue stamp duties, allowing taxpayers to regularise their stamp duty affairs at a substantially lower cost.
The programme covers instruments executed between Jan 1 2023 and Dec 31 2025. Instruments submitted under the SVDP will generally be accepted without an audit, although Malaysia’s Inland Revenue Board (IRB) has indicated that selective test checks may be conducted to preserve the integrity of the programme.
A common concern among taxpayers is whether the IRB will review periods prior to 2023. Based on explanations provided during public engagement sessions, the general understanding is that while the IRB may possess the legal authority to do so, it is not the intended focus of the current SVDP exercise. This appears consistent with the programme’s objective of promoting voluntary compliance and raising awareness of stamp duty obligations.
Time is critical
With about 15 days remaining before the SVDP closes, taxpayers who have yet to assess their stamp duty exposure should act without delay. Unlike previous tax amnesty programmes, participation in the SVDP is not merely a matter of paying additional tax without providing the underlying documents and basis.
Taxpayers are required to identify instruments that were not stamped or insufficiently stamped, determine whether they are chargeable to duty, calculate the applicable duty and upload the relevant information and documents through the e-Duty Stamp portal. For businesses with large volumes of contracts and agreements, this can be a time-consuming exercise.
The process is complicated by the fact that many provisions of the Stamp Act 1949 were drafted decades ago using terminology that does not always fit neatly with modern commercial transactions. As a result, determining the correct stamp duty treatment may require careful analysis and interpretation.
Post-SVDP
Taxpayers should not assume that the end of the SVDP marks the end of the IRB’s focus on stamp duty compliance. On the contrary, the post-SVDP period is expected to usher in a more robust enforcement environment.
The amendments that took effect from Jan 1 2026 have significantly strengthened the administration of the Stamp Act 1949. Among the key changes are statutory audit powers, the ability to review records for up to five years, the issuance of assessments and additional assessments, higher penalties, and new penalties for failures such as submitting incorrect returns or failing to maintain records.
The IRB has already increased its stamp duty audit activities, and this trend is expected to intensify. Historically, many taxpayers paid limited attention to stamp duty compliance, particularly for related-party and intra-group transactions, on the assumption that stamping was only necessary if a document might be relied upon in court. Such assumptions are unlikely to withstand the current enforcement landscape.
The way forward
As awareness of the SVDP increases, there has been a noticeable surge in voluntary disclosures. However, with the deadline fast approaching, many taxpayers may struggle to complete the necessary review and submission process by June 30.
Given the complexity of the stamp duty regime and the programme’s objective of promoting voluntary compliance, there may be merit in considering a further extension of three to six months. Such an extension would allow more taxpayers to regularise their affairs and support the broader goal of improving long-term stamp duty compliance.
This article is contributed by Thannees Tax Consulting Services Sdn Bhd managing director SM Thanneermalai (www.thannees.com).