The Finance Bill 2019 (“Bill”) was passed by the Dewan Rakyat (House of Representatives) and the Dewan Negara (Senate) of the Malaysian Parliament on 2nd and 18th December 2019 respectively. The Bill will be gazetted after the assent of the Yang di-Pertuan Agong has been received and will become law and come into operation on the various dates specified in therein.
When the Bill becomes law, clause 28 thereof will amend item 27(a)(ii) of the First Schedule of the Stamp Act 1949 so that the stamp duty payable on a charge or mortgage, agreement for a charge or mortgage, bond, covenant or debenture where the loan is a foreign currency loan (i.e. a loan denominated wholly in currencies other than the Ringgit) or the financing was made according to the Syariah in currencies other than Ringgit will be RM5.00 for every RM1,000 or part thereof but the total duty payable shall not exceed RM2,000. Presently, the maximum amount of stamp duty payable under item 27(a)(ii) is RM500.
According to Clause 27 of the Bill, the above-referred amendment will come into operation on 1 January 2020.
The increase in stamp duty under item 27(a)(ii) of the Stamp Act 1949 was one of the measures announced during the 2020 Malaysian Budget.
Note: The clause references in this Alert refer to the amended clause numbering arising from the deletion of clause 19 of the Bill.