The Stamp Duty Act 1949., Properties to cost more.
Dec 29 2010, 01:34 AM, updated 8y ago
Group: Junior Member
Joined: Mar 2009
The Stamp Duty Act 1949
In line with the provisions under section 80(2), Stamp Duty Act 1949, the YB Minister of Finance has decided that the stamp duty policy on service agreements (including construction contracts) will be as follows:-
i. All service agreements signed with effect from 1st January 2011 will be imposed stamp duty at 0.1% ad-valorem on the service contract value;
ii. If the service involves multi-tier, the said service agreement will be imposed stamp duty at 0.1% ad-valorem at one level only. The stamp duty at 0.1% ad-valorem will be imposed either at:
a. First tier for service agreements signed between a private entity with the service provider.
b. Second tier for service agreements signed between an entity which have been exempted from paying the stamp duty (e.g. The Government of Malaysia) with the service provider.
Service agreements signed at other levels will be imposed a flat rate RM50.00 stamp duty.
In summary the above means as follows:-
1. Private Contracts
First tier (Client & Main Contractor) – ad-valorem stamp duty (0.1% of contract value).
Second tier onwards– stamp duty at RM50.00 flat rate.
2. Government Contracts
First tier (Government & Main Contractor) – exempted from paying stamp duty.
Second tier (Main Contractor & Sub Contractor) – ad-valorem stamp duty (0.1% of contract value).
Third tier onwards – stamp duty at RM50.00 flat rate.
iii. In the event the service agreement is cancelled by the party which offers the contract and the stamp duty has been paid up for all the related service agreements, only the stamp duty of 0.1% ad-valorem will be returned. Whilst the RM50.00 flat rate stamp duty paid on the other service agreements will not be returned.
Mar 24 2011, 02:59 PM
Joined: Jan 2007
Our company id facing the same problem.
We we awarded a construction contract by Perbadanan Kemajuan Negeri Selangor (PKNS) and the Letter of Award dated August 2010.
Check with the Stamping office, PKNS is not consider a government dept. Hence we need to pay 0.1% of stamp duty.
The contract should have been binded,signed and stamped before 31 Dec 2010 but due to the delay and the absent of the Menteri Besar and State Secretary to sign at that time and the delay by the QS to prepare the Document, the document is only ready for signing now.
We were thinking of Back dating the contract to Last year, but the New Selangor state secretary just being sworn in.
The client insisted that the contractor pay for the Stamp duty amounting to RM56,000.00 because the PWD203A contract stated contractor to pay stamp duty.
But the delay is not cause by us, we don't think is fair to ask us to pay.
Anyone could advise
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