Licensing Agreement Stamp Duty Malaysia: What You Need to Know
A licensing agreement is a legal contract between two parties where the licensor grants the licensee the right to use their intellectual property. In Malaysia, licensing agreements are subject to stamp duty, which is a type of tax collected by the government.
What is Stamp Duty?
Stamp duty is a tax collected on legal documents such as agreements, contracts, and deeds. In Malaysia, stamp duty is collected under the Stamp Act 1949. The purpose of stamp duty is to generate revenue for the government while also providing legal authentication to the document. The amount of stamp duty payable will depend on the type of document and its value.
Licensing Agreement Stamp Duty
A licensing agreement is a type of legal document that is subject to stamp duty in Malaysia. The amount of stamp duty payable will depend on the value of the licensing agreement. In Malaysia, the stamp duty payable for a licensing agreement is RM10 for every RM1,000 or part thereof of the consideration for the agreement, subject to a maximum of RM500.
For example, if the value of a licensing agreement is RM50,000, the stamp duty payable would be RM500. If the value of the licensing agreement is RM25,000, the stamp duty payable would be RM250.
The stamp duty payable for a licensing agreement is usually borne by the licensee, although the parties can negotiate and agree to share the cost.
How to Pay Stamp Duty
Stamp duty can be paid at any stamp office or online via the e-Stamping system. The stamp duty must be paid within 30 days from the date of execution of the licensing agreement. Failure to pay the stamp duty within the prescribed time may result in a penalty.
In conclusion, licensing agreements in Malaysia are subject to stamp duty, which is a tax collected on legal documents. The stamp duty payable for a licensing agreement will depend on the value of the agreement, and it must be paid within 30 days from the date of execution. If you are entering into a licensing agreement in Malaysia, it is important to factor in the stamp duty payable and ensure that it is paid within the prescribed time.