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New Straits Times
06-07-2025
- Business
- New Straits Times
Call to simplify stamp duty exemption for older work contracts
KUALA LUMPUR: The Malaysian Industrial, Commercial and Service Employers Association (MICSEA) has called on the Inland Revenue Board (IRB) to allow a one-time bulk submission of employment contracts signed before 2025 to obtain stamp duty exemption certificates. MICSEA said the proposal would simplify compliance and reduce paperwork for employers following the IRB's latest frequently asked questions (FAQs) issued on July 3. "This initiative would encourage more employers to come forward and regularise their documents in an efficient, streamlined manner," MICSEA said in a statement. The IRB's new FAQ document aims to clarify employers' obligations under the Stamp Act 1949. Key takeaways include the clarification that employment contracts signed before Jan 1, 2025, and already exempt from stamp duty, may still be submitted for certification, as outlined in Question 15 of the FAQ. The use of the word "boleh" (may) indicates that submission is optional, providing flexibility for employers. However, from Jan 1, 2025, onwards, all employment contracts must be stamped, in accordance with subsection 4(1) of the Stamp Act. Question 17 uses the word "hendaklah" (must), affirming that stamping is mandatory for all new contracts going forward. The FAQ also distinguishes between internship and apprenticeship agreements. In Question 7, the IRB confirms that internship agreements are not required to be stamped, as they do not constitute a formal employer-employee relationship. MICSEA welcomed this clarification, calling it "crucial and welcomed", especially for companies running internship programmes as a talent pipeline. "In contrast, apprenticeship agreements do require stamping, as these are considered formal employment relationships governed under the Employment Act 1955," MICSEA said. MICSEA also urged employers to review the full FAQ and consult experts where needed. The association said it is working with HR consultants and certified training providers to roll out further support and compliance training. "We remain committed to supporting employers in navigating policy changes while maintaining fair, compliant practices," it added.
Borneo Post
05-07-2025
- Business
- Borneo Post
Internship agreements not subject to stamp duty, MICSEA confirms
Lai says the clarification is both timely and essential, particularly for employers seeking to comply with legal requirements without unnecessary confusion. — Bernama photo KUCHING (July 5): Internship agreements are not required to be stamped as they do not constitute a formal employer-employee relationship, said the Malaysian Industrial and Commercial Employers Association (MICSEA), citing clarifications from the Inland Revenue Board (LHDN) FAQs. MICSEA president YK Lai said the clarification is both timely and essential, particularly for employers seeking to comply with legal requirements without unnecessary confusion. 'This clarification is crucial and welcomed, as it ensures that companies can continue to offer internships without administrative hurdles or added cost implications,' he said in a statement. 'With this, many employers can now confidently enhance their internship programmes without fear of non-compliance. It also ensures that internship opportunities will not be disrupted or deterred, supporting the government's initiative to prepare students to be industry-ready upon graduation.' He added that many companies view internship programmes as an important talent pipeline, and the assurance provided will allow them to contribute meaningfully to graduate employability and real-world exposure. In contrast, Lai said apprenticeship agreements do require stamping as they are considered formal employment relationships governed under the Employment Act 1955. He added that employment contracts that have been exempted may obtain a stamp duty exemption certificate. 'This implies that submission is optional, offering flexibility to employers with exempted pre-2025 contracts.' He further noted that employment contracts sealed from 2025 onward must be submitted to LHDN for stamping in accordance with subsection 4(1) of the Stamp Act 1949. To further promote voluntary compliance and ease the process, Lai proposed that LHDN allow for a one-time bulk submission of all employment contracts signed before Jan 1, 2025 to obtain the stamp duty exemption certificate. 'This initiative would encourage more employers to come forward and regularise their documents in an efficient, streamlined manner,' he said. He also called on all employers to review the full FAQs for better understanding and continue consulting with relevant experts where needed. 'MICSEA is working closely with all its members together with HR Edge Consulting Sdn Bhd (HRedge) and will issue further guidance to support smooth implementation via training with MyFreelys Academy, a certified HRDCorp Training Provider. 'We remain committed to supporting employers in navigating policy changes while maintaining fair, compliant practices,' added Lai. employment internship LHDN MICSEA stamp duty
Borneo Post
06-06-2025
- Business
- Borneo Post
MICSEA hails stamp duty exemption for pre-2025 employment contracts
Lai says the decision reflects the government's commitment to supporting businesses while ensuring regulatory compliance through proper enforcement. – Bernama photo KUCHING (June 7): The Malaysian Industrial, Commercial and Service Employers Association (MICSEA) has lauded the government's move to grant stamp duty exemptions for employment contracts signed before Jan 1, 2025. Its president YK Lai said the decision reflects the government's commitment to supporting businesses while ensuring regulatory compliance through proper enforcement. 'Recognising the high volume of employment contracts between employers and employees that were not stamped as required under the First Schedule of the Stamp Act 1949, the Ministry of Finance, under the leadership of the Madani Government, has decided to grant full stamp duty exemption and penalty waivers for employment contracts signed before Jan 1, under Subsection 80(1A) and Subsection 47A (2),' he said in a statement yesterday. He added that contracts signed between Jan 1 and Dec 31, 2025, will still be subject to stamp duty, but late penalty charges will be waived provided the documents are stamped by Dec 31 this year. Meanwhile, Lai noted that for contracts signed from Jan 1, 2026, onwards under the new Self-Assessment System for Stamp Duty (STSDS), full stamp duty and applicable penalties will be enforced. He said the exemption and penalty waiver for pre-2025 contracts demonstrates the government's sincere commitment to fostering a collaborative environment and ensuring fair enforcement. As such, he urged all employers and human resource professionals to use this opportunity to review and update all employment contracts to ensure full compliance ahead of the 2026 STSDS implementation. lead MICSEA stamp duty exemptions
Borneo Post
06-06-2025
- Business
- Borneo Post
MICSEA welcomes e-invoicing exemption for businesses below RM500,000 annual income
Lai says this would give more time to MSMEs to prepare for the implementation of the mandatory e-invoicing system for businesses. – Stock photo from Pixabay KUCHING (June 7): The Malaysian Industrial, Commercial and Service Employers Association (MICSEA) welcomes the government's decision to exempt businesses with an annual income of RM500,000 and below from the e-invoicing requirements. Its president YK Lai said this would give more time to micro, small and medium enterprises (MSMEs) to prepare for the implementation of the mandatory e-invoicing system for businesses. He was delighted that the Inland Revenue Board of Malaysia (HASiL) understands the difficulties MSMEs face in implementing the e-invoicing system, especially due to limited time and insufficient tools in terms of management. 'This change is expected to bring immediate relief to more than 90,000 additional micro and small enterprises, bringing the total number of exempted businesses to approximately 790,000, representing Malaysia's smallest and most vulnerable traders,' he said in a statement yesterday. Lai said MICSEA regarded this as a major step forward in reducing any management burden on MSMEs who may not have the digital infrastructure or resources to handle complicated invoicing requirements. For businesses with an income of RM500,000 and above, he noted that HASiL continues to show leniency by extending the grace period. According to him, businesses earning RM5 million to RM25 million in annual revenue must implement e-invoicing by July 1 this year. 'Businesses with RM1 million to RM5 million in annual revenue now have until Jan 1 next year, while businesses earning up to RM1 million annually will follow suit by July 1 next year.' Even during the extended grace period, Lai believed that employers benefit from greater flexibility as they can continue using consolidated e-invoices for employee reimbursements, client billing, and vendor payments. He said they are not required to issue individual invoices unless requested by the buyer and no enforcement action will be taken under Section 120 of the Income Tax Act 1967, as long as basic consolidated invoicing rules are followed. 'This is a timely and considerate move by the government, and MICSEA fully supports this decision especially as many employers are still recovering from post pandemic financial strain. 'These updated exemptions and deadlines allow more room for businesses to invest in the right tools to manage implementation of the system without the pressure of sudden compliance obligations,' he added. e-invoicing exempt lead MICSEA
Borneo Post
22-05-2025
- Business
- Borneo Post
MICSEA proposes flexible retirement option, warns of challenges
Lai says the government should introduce clear retirement guidelines that take into account the physical demands faced by older workers, particularly in certain sectors. – Bernama photo KUCHING (May 23): The Malaysian Industrial Commercial Services Employers Association (MICSEA) has proposed a flexible retirement framework that allows workers the option to retire earlier or remain in the workforce up to age 65. Its president YK Lai said the government should introduce clear retirement guidelines that take into account the physical demands faced by older workers, particularly in certain sectors. He added that stronger statutory protections are needed to safeguard both younger and older workers to ensure fair treatment across the board. 'Furthermore, we recommend improving hiring strategies for younger workers by providing structured career pathways, while ensuring these efforts do not disadvantage aged employees who choose to remain in the workforce. 'There should also be targeted support for low-income and manual workers, many of whom may not equally benefit from extended employment without proper assistance,' he said in a statement yesterday, in response to the government's recent initiative to study extending the retirement age to 65. Lai noted that with Malaysia's rising life expectancy, many senior employees remain willing and capable of continuing to work beyond the current retirement threshold. However, he stressed that any such change must be supported by proper policy frameworks. He also cautioned against the potential risk of limiting job opportunities for young Malaysians, which could threaten generational equity in the job market. 'Many Malaysians, particularly those in demanding roles, have raised valid concerns that a higher retirement age could impose undue burden on older workers and worsen financial stress among low-income groups. 'For businesses, especially in industrial and service sectors, this proposal introduces complex challenges in workforce planning, occupational health and safety, and employee benefits,' he added. Lai emphasised that a one-size-fits-all approach would not meet the diverse needs of Malaysia's workforce. He urged the adoption of a flexible retirement policy – one that is carefully managed to prevent inequality and ensure long-term sustainability. 'As the voice of employers across Malaysia's industrial, commercial, and service sectors, MICSEA is committed to shaping this transition responsibly and sustainably, should the suggestion to increase the retirement age to 65 be implemented. 'We encourage policymakers, business leaders, and HR professionals to collaborate with the government to design a retirement strategy that is progressive and reflective of the realities faced by Malaysian workers,' he added.
