Ringgit Malaysia loan agreements usually come with a stamp duty of 0.5%. For RM loan agreements or UNSECURED RM credit instruments, however, a reduced stamp duty of 0.1% is available, which can be repaid on request or as a single local payment. The High Court in North Western Services v. Chan Yin Leng & Anor. In short, the appellants argued that the unstamped investment agreement was not admissible. The respondent had argued that the Defs themselves had refused to stamp the agreements. If you wish to file an unstamped document as evidence in court, you must stamp the document and pay the late timestamp penalty to the Inland Revenue Board (LHDN). However, it is not clear from the law whether unstamped instruments are valid and enforceable. The legal situation regarding the question of the validity of unstamped instruments is reflected in a Federal Court case Malayan Banking Bhd v. Agencies Service Bureau Sdn Bhd & Ors (1982) 1 MLJ 198, in which it was held that the unstamped instrument affects only the admissibility of the instrument of proof, but does not invalidate that particular instrument. The court also noted that “the objection to the stamp is really about securing state revenues, unless the non-stamping serves the root or validity of the instrument or the case relates to a tax dispute.” The purpose of stamping the agreement(s) is to protect the contracting parties with regard to the admissibility of the document as evidence before the court in the course of civil proceedings.
A document that is not properly stamped is not admissible as evidence in court. Exemption from stamp duty on the transfer and loan instrument for the purchase of a residential property with a value between RM300,001 and RM2,500,000 by Malaysian citizens under the 2020/2021 Home Ownership Campaign: exemption from stamp duty for all instruments related to the purchase of real estate by a financier for the purpose of renting it in accordance with the principles of Sharia or of any instrument, with the financier the contractual obligations of a client under a main purchase contract. On the basis of the above-mentioned authorities, it appears that the unstamped agreements remained valid, although they were inadmissible as evidence in court. Therefore, any party wishing to offer an unstamped agreement in court must have the agreement stamped so that it is admissible as evidence. A contract between a company or another individual, an agreement between the two parties is also called consensus ad idem. This agreement here, the contract/instrument of commerce, is what needs to be stamped. It must be stamped with the LHDN (Lembaga Hasil Dalam Negeri/Inland Revenue Board) and stamp duty will be levied as determined by the LHDN in accordance with section 4 of the Stamp Act 1949. The reason why agreements must be stamped is given in paragraph 52(1)(a), where only a duly stamped agreement can be admitted as evidence. In high court of Omega Securities Sdn Bhd v. Dato` Hamzah Bin Abdul Majid (2011) 8 MLJ 12, in which the question was raised before the Court of Justice as to the nullity of the margin facility agreement due to the non-affixing of that agreement. In this case, the court referred to the principle used in the Malayan Banking Berhad Federal Court case and further ruled that “in this case, the non-stamping of the margin facility agreement did not go to the root or validity of the document.
It was just a matter of government revenue. Therefore, the agreement on the margin facility remained valid. If an unmarked agreement were still to be admitted as evidence in court by the parties, a penalty would be imposed for such a delay in stamping under Article 47A, as an agreement or instrument must be stamped within 30 days of its execution (signature) if signed in Malaysia, and the court will issue a follow-up order for stamping the agreement. 300,001 – 500,000 – Of the first 300,000 – 300,001 to 500,000 (Transfer instrument and loan agreement) (Note 1) Another recent case, similar to CIMB Bank Berhad v Vacation Asia (MY) Sdn Bhd & Ors, the High Court also ruled that not serving the letter of offer is not a valid matter, because it did not go to the root or validity of the document itself. Exemption from stamp duty on instruments performed by a contractor or rescue promoter, that is, a contractor or developer designated or approved by the Minister of Housing and Local Government to carry out renovation work on an abandoned project. Instruments are loan agreements and transfer instruments approved by the authorized funder for the purpose of transferring revitalized residential property in connection with the abandoned project. .