How important of stamping the tenancy agreement?
If the lease contract does not pay the stamp duty and stamping on the Inland Revenue Board (LHDN), does the contract still have legal effect?
According to Article 4 of the Stamp Tax Act 1949 and the First Schedule, the lease contract needs to be stamped. If the landlord and the tenant have signed the relevant contract, but within 30 days from the date of implementation (the “prescribed period”), they have not taken the inland tax bureau to print and seal, the relevant contract is still legally binding. However, under the provisions of section 52(1)(a) of the Act, a lease contract that is not stamped cannot be inadmissible in evidence.
If either party wants to take legal action against the party that breached the contract and the relevant contract is an important piece of evidence, then the relevant person needs to stamp and seal the contract and pay the fine mentioned in section 47A(1) :-
1. RM25 or 5% of the under-tax (whichever is higher) – if the contract is stamped within 3 months after the specified time limit;
2. RM50 or 10% of the insufficient tax (whichever is higher) – if the contract is stamped within 3 months to 6 months after the specified time limit;
3. RM100 or 20% of the under-tax (whichever is higher) – if the contract is stamped and stamped 6 months after the specified period.
Related laws and regulations： Stamp Act 1949
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