Hanoi:First paragraph of the news story.

According to BERNAMA News Agency, a stamp duty remission exceeding RM10 has been proposed for second-tier agreements between mid-tier companies (MTCs) and financial institutions. This involves excess credit facilities extended to micro, small, and medium enterprises (MSMEs) from January 1, 2027, to December 31, 2030.

The proposal, outlined in the 2027 Tax Measures document published by the Ministry of Finance (MoF), aims to enhance MSMEs' cash flow by allowing them early access to payments from the credit facilities provided by MTCs.

To qualify for the remission, the MSME supplier must satisfy the condition of having fulfilled its contract to supply goods or services to the MTC. Additionally, the supplier should not be a parent company, subsidiary, or related company of the MTC.

Currently, loan or financing agreements incur an ad valorem stamp duty at a rate of 0.5 per cent. However, there is a stamp duty exemption for principal factoring or invoice financing agreements executed by MSMEs with factoring companies registered with MoF and members of the Malaysia Factoring Association, applicable from January 1, 2022, to December 31, 2025.

The MTC Supplier Financing Programme, According to document, incorporates the reverse factoring concept. This requires both a first-tier credit facility agreement and a second-tier agreement for utilizing excess credit facilities, both subject to the 0.5 per cent ad valorem stamp duty rate.

Under the proposal, the stamp duty rate for first-tier agreements is set to remain unchanged at the ad valorem rate of 0.5 per cent.