Stamp Duty Exemption vs Remission vs Relief: What Malaysian Businesses Need to Know

In Malaysia, stamp duty compliance remains a critical yet often misunderstood area of law, especially for businesses with high volumes of agreements such as employment contracts, service agreements, leases, and novation deeds. With the shift to the self-assessment system effective 1 January 2026, companies must accurately determine whether an instrument attracts full duty, qualifies for exemption, or benefits from remission or relief. Missteps can trigger LHDN audits, late stamping penalties, and fines under the Stamp Act 1949 (“SA 1949”).

At Donovan & Ho, we frequently advise multinational and enterprise clients on stamp duty optimisation. Below is a clear breakdown of the key differences between stamp duty exemption, remission and relief.

What is Stamp Duty Exemption? 

Exemption means the instrument is completely exempted from stamp duty liability under the SA 1949, either through specific provisions in the First Schedule, or through individual Exemption Orders.

• The instrument is treated as non-dutiable. 
• No stamp duty is payable at all (or on the relevant portion).
• Exemption must be applied or selected manually when submitting the stamping application via the e-Duti Setem portal, and it usually requires LHDN’s official endorsement. Failing to do so can potentially open up instruments which are exempted to non-stamping risks and penalties. 

Common Examples:

• Instruments listed under Section 35 and First Schedule of the SA 1949 under the heading “General Exemptions” (e.g., selected government-related contracts (Para 1, General Exemptions, First Schedule of the SA 1949)).
• Specific instruments listed under the heading “Exemptions” under Items 2, 4, 23, 24, 32, 49 58 and 59 of the First Schedule of the SA 1949.
• Other specific exemptions granted by the Minister of Finance under Section 80 of the SA 1949. These are certain instruments covered under specific Stamp Duty (Exemption) Orders, e.g.:

1. first-time homebuyer reliefs in designated periods (Stamp Duty (Exemption) (No. 2) 2021 (Amendment) Order 2025 (P.U. (A) 449/2025); 
2. specific property transfers between parent-child (Stamp Duty (Exemption) (No. 3) Order 2023 (P.U. (A) 178/2023) or spouses (Stamp Duty (Exemption) (No. 10) Order 2007 (P.U. (A) 420/2007) or other qualifying transactions. 

Duty payers need to state the gazette reference or submit the exemption letter issued by the Minister of Finance when making an application for stamping or adjudication. These exemptions can be selected and applied in the e-Duti Setem portal. 

Key Point: Even with a valid stamp duty exemption, proper documentation and LHDN endorsement are essential, particularly in the self-assessment era, to withstand potential stamp duty audits.

What is Stamp Duty Remission?

Remission applies when an instrument is dutiable, but the Minister of Finance (via Stamp Duty (Remission) Orders) grants relief by reducing or waiving only a part of the stamp duty payable. In essence, the amount of duty is reduced to a rate approved by the Minister of Finance via the specific Remission Orders under Section 80 of the SA 1949.

Here’s how a stamp duty remission typically works:

• Stamp duty is first computed according to the applicable Item in the First Schedule.
• A portion of the stamp duty is then remitted (forgiven) pursuant to a specific Remission Order. The Remission Order may impose certain qualifying conditions which need to be applied or interpreted carefully, failing which penalties for incorrect or under-stamping may ensue. 
• It is typically conditional and requires application/assessment via manual selection through the e-Duti Setem portal.

Common Examples:

• Partial remission on certain loan or financing instruments (Stamp Duty (Remission) (No. 2) Order 2012 (P.U. (A) 258/2012).
• Reduced effective rates on service agreements (Stamp Duty (Remission) Order 2021 (P.U. (A) 428/2021). 

Key Point: The instrument still remains dutiable — the remission is essentially a ‘discount’ or a ‘cap’ of the total stamp duty liability.

What is Stamp Duty Relief?

 Relief means the instrument is completely relieved from stamp duty liability under either Section 15 or Section 15A of the SA 1949, which typically involves inter-company merger, amalgamation or restructuring or transfer of properties between associated companies.

Common Examples:

• Reconstructions or amalgamations of companies (Section 15). Formal applications with supporting documents need to be submitted to the LHDN.
• Qualifying transfers between associated companies (Section 15A). Formal applications with supporting documents need to be submitted to the LHDN.

Key Point: This is an exemption that involves a more substantial application process, additional qualifying requirements and ongoing compliance obligations, and requires approval from LHDN. Further, there are currently only two available reliefs under this exemption framework.   

Side-by-Side Comparison of Exemption vs Remission vs Relief

For any stamping matters or related enquiries, please feel free to reach out to us. Our Corporate & Commercial practice group will be pleased to assist with any stamping-related queries you may have, including requirements, procedures, and applicable reliefs.

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This article was written by Shawn Ho (Partner) with the assistance of Chin Wan Xin (Associate) from Donovan & Ho’s corporate practice. 

Our corporate practice group advises on corporate acquisitions, restructuring exercises, joint venture arrangements, shareholder agreements, employee share options and franchise businesses, Malaysia start-up founders and can assist with venture capital funds in Seed, Series A & B funding rounds. Feel free to contact us if you have any queries.