Stamp duty exemption for merger or acquisition by SMEs


The Stamp Duty (Exemption) (No. 3) Order 2021 (“Exemption Order”) exempts instruments in relation to an approved merger or acquisition executed by small and medium enterprises from stamp duty.

The Exemption Order was gazetted on 25 February 2021 and is deemed to have come into operation on 1 July 2020.

In order for the stamp duty exemption to apply:

1. The instrument must be executed by an SME.

A business will be classified as an SME if it fulfils all three conditions relating to qualifying criteria, type of establishment and shareholding structure as set out in the Guideline for SME Definition issued by SME Corporation Malaysia.

2. The instrument must be any of the following:

(i)         contract or agreement for the sale or leasing of property (land, building, machinery and equipment);

(ii)        instrument of transfer and memorandum of understanding;

(iii)       loan or financing agreement; or

(iv)       first leasing agreement.

3. The instrument must be executed by an SME on or after 1 July 2020 but not later than 31 December 2021.

4. The merger or acquisition must be approved by the Ministry of Entrepreneur and Cooperatives from 1 July 2020 but not later than 30 June 2021.

The information in this article is intended only to provide general information and does not constitute any legal opinion or professional advice.

Image by Gerd Altman from Pixabay.

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