Bursa Malaysia Contract Stamp Duty

As an aspiring investor, you may be wondering about the legal requirements when it comes to trading on Bursa Malaysia. One important aspect to consider is the contract stamp duty, which is a type of tax imposed on transactions made on Bursa Malaysia. In this article, we’ll take a closer look at what the contract stamp duty is and how it works.

What is Bursa Malaysia?

Bursa Malaysia is the main stock exchange in Malaysia, with over 900 listed companies. It is the fourth largest exchange in Asia Pacific and the seventh largest in the world. It offers a variety of securities for investors to trade, including stocks, bonds, derivatives, and commodities.

What is contract stamp duty?

Contract stamp duty is a type of tax charged on contracts and agreements made in Malaysia. This includes contracts made on Bursa Malaysia, such as stock trading agreements and futures contracts. The duty is paid by the buyer or seller, depending on the terms of the agreement.

How much is the contract stamp duty?

The contract stamp duty rate varies depending on the type of transaction. For stock transactions, the stamp duty is 0.1% of the value of the transaction, or a maximum of RM 200. For futures contracts, the duty is 0.01% of the contract value, with a minimum of RM 1 and a maximum of RM 50.

Who pays the contract stamp duty?

The contract stamp duty can be paid by either the buyer or the seller, depending on the agreement between the two parties. In some cases, it may be split between both parties. If the buyer or seller fails to pay the duty, they may be subject to penalties and legal action.

Why is the contract stamp duty important?

The contract stamp duty is an important aspect of trading on Bursa Malaysia, as it helps raise revenue for the government. It also ensures that contract agreements are legally binding and enforceable. Failing to pay the contract stamp duty can result in legal consequences, so it is important to be aware of this requirement when trading on the exchange.

Conclusion

In summary, the contract stamp duty is an important tax on transactions made on Bursa Malaysia. It is a legal requirement that must be paid by either the buyer or seller, and failure to do so can result in legal consequences. As an investor, it is important to be aware of this requirement and include it in your trading calculations.