Here are a few guidelines to understand how to calculate stamp duty of shares
Guidelines on Stamp Duty
A summary of the 2020 Guidelines published by IRB to provide guidance for the calculation of stamp duty on instruments of transfer of shares, in which cases for the shares that are not quoted on Bursa Malaysia.
The basis of valuation of the shares has been updated and includes the removal of the par value that is in line with the provisions in the Companies Act 2016. The Price Earning Multiple value which was used for computing the Price Earning Ratio (PER) is no longer valid.
However, both 2019 and 2020 Guidelines state that the audited accounts of the company must be submitted with the Form of Transfer of Securities. The categories of companies that will be able to qualify for the audit exemptions are threshold-qualified companies, dormant companies, and zero-revenue companies.
Both 2019 and 2020 Guidelines reaffirm that contrary to Section 102 of the Companies Act 2016, the company secretary is accountable for maintaining that all the particulars are relevant to the issue and transfer of shares are put into the register of members.
The 2020 Guidelines indicate that the stamp duty will be imposed on the value of shares rounded up to the nearest thousand. An example, for the calculation of stamp duty of shares is that for every RM 1,000 or fractional part of RM 1,000 will be imposed to RM 3.
[Below is our own calculator we have created for you to try out]
[template:stamp_duty_calculator]
Question & Answer
A common question is, “Do I need to pay stamp duty if I increase my company share capital from RM 100 to RM 100,000?”.
The simple answer is No. This is because increment of share capital or allotment of share do not require to pay Stamp Duty. However, this means that only transferring of shares will require you to pay Stamp Duty.
Another question frequently asked is, “Will this calculation be applicable for Real Property Company (RPC) as well?”.
The answer is No. The transfer of shares for RPC will need to follow the RPGT Act.
RPGT Act
Under the RPGT Act, an RPC or also known as Real Property Company is a controlled company. The defined value of its owned property or RPC shares in another RPC or both is not less than 75% of the value of its total tangible assets. If the defined value goes below or less than 75%, then a real property company is no longer an RPC.
Acquisition Price
The acquisition price under the RPGT Act will be calculated according to the formula, A/B x C, if the acquisition date is the date the company becomes an RPC.
Formula: A/B x C
A = number of shares deemed to be a chargeable asset
B = total number of issued shares in the relevant company at the acquisition date of the chargeable asset
C = defined value of the real property or shares or both owned by the relevant company at the acquisition date of the chargeable asset.
If the acquisition date is the date of purchase of the chargeable asset, then the price will be the amount paid to buy the RPC shares or at a consideration judged to be the market value of the RPC shares.
Disposal Price
The amount of the consideration in money or money’s worth for the disposition of RPC shares is referred to as the disposal price. A taxable gain and RPGT will be assessed if the disposal price is greater than the acquisition price.
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