Malaysia is implementing the Self-Assessment Stamp Duty System (STSDS), a significant shift in tax compliance issued by Lembaga Hasil Dalam Negeri Malaysia (HASiL). Effective 1 January 2026.
Regulatory Update (Budget 2026 – Effective 1 January 2026)
In addition to the introduction of the Self-Assessment Stamp Duty System (STSDS), Budget 2026 proposes an increase in the stamp duty exemption threshold for employment contracts. Contracts with monthly wages of RM3,000 or below will be exempt, while those above RM3,000 remain subject to stamp duty.
Importantly, under STSDS, all employment contracts must still be assessed before execution to determine whether the exemption applies.
New Requirements
- Self-assess stamp duty obligations
- Submit declarations via MyTax portal
- Pay duty promptly and retain comprehensive records
Is This an HR Responsibility?
Key Insight: HR is often the first point of issuance for these documents, making early identification critical.
Stamp duty may apply to several categories of HR-managed documents:
What Changes Under Self-Assessment
Critical Operational Shift: Documents must be assessed correctly before execution, not after. The responsibility for accuracy moves from external assessment to internal controls.
2026 Transition Year
Key Reassurance for Implementation
Payroll & Outsourced Manpower
HR faces elevated compliance touchpoints in organisations using alternative workforce models:
Documents between Employer ↔ Employee and Client ↔ Agency may be subject to stamp duty, depending on contractual structure and nature of services.
HR’s Role
Coordinate with Finance/Tax
Determine stamping responsibility for each document type
Route via MyTax
Ensure contracts flow through proper submission channels
Confirm Before Execution
Never execute contracts without confirmed compliance
Especially Critical For:
What This Does Not Mean
Avoiding Critical Misunderstandings
Key Takeaways: STSDS does not turn HR into tax specialists
But it does make HR a critical first line of compliance for employment-related documents. Strong HR processes established in 2026 will significantly reduce compliance risk in subsequent years.
Regulatory Change Is Manageable. Misalignment Creates Risk.
If you’re:
Preparing for Malaysia’s Self-Assessment Stamp Duty requirements effective 1 January 2026
Reviewing employment contracts, assignment letters, or manpower-related agreements for stamp duty exposure
Clarifying the operational role of HR versus Finance and Legal under STSDS
Managing high-volume hiring or outsourced workforce arrangements
Strengthening internal controls to ensure documents are assessed before execution
📩 Contact Kanry Search to align HR processes with STSDS requirements and ensure employment documentation withstands retrospective review.
📎 Source
📄Ministry of Finance Malaysia, Belanjawan 2026 – Lampiran Cukai, pp. 20–21
