Services & Stamp Duty 2025: Contract for Services

Services & Stamp Duty 2025: Contract for Services

Understanding Stamp Duty on Service Agreements

A Contract for Services applies when an individual or company is engaged to provide services, not as an employee. Proper stamping ensures compliance under Malaysian law and protects both parties legally.

As a licensed Accounting & Tax Firm in Johor Bahru, we’ve summarized the essentials below for your convenience.

📄 What Falls Under Contract for Services?
Typical service agreements include:

Pest control contracts
Machine maintenance contracts
Cleaning services
General support services

⚖️ Key Distinction: Contract of Service vs. Contract for Services

Aspect	Contract of Service (Employment)	Contract for Services (Independent)
Relationship	Master & Servant	Principal & Independent Contractor
Work Control	Employer controls work	Contractor has independent control
Statutory Benefits	EPF, SOCSO, etc.	None
Clauses	May include non-compete/exclusivity	Usually service scope only
Stamp Duty	RM10	RM10 simple / 0.1% of contract value (ad valorem) if service fee mentioned

Example:

RM50,000 service contract → Stamp duty = RM50 (0.1% of value)
Simple agreement without fees → Fixed RM10 duty

🏷️ Other Stamp Duty Scenarios

Dealer Agreements – Contract between company & dealer/agent, usually defining sales targets, commissions, and obligations → Stamp duty RM10
Sale of Fixed Assets – Subject to ad valorem stamp duty
Service Tax vs. Stamp Duty – Stamp duty applies to the contract document; service tax applies to the service fee (currently 8%). They are separate taxes, not double tax, but may appear as double cost.

💼 Ensure Compliance With Us

As licensed Tax Agents & Auditors in Johor Bahru, our team can assist with:

Service agreement stamping
Stamp duty advisory
Service tax compliance
Contract structuring
Corporate tax advisory

📞 Contact us today to ensure your service agreements are fully compliant.

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