As we approach the start of 2026, business owners should be aware of several important tax measures introduced by the Inland Revenue Board of Malaysia (IRBM), effective from 1 January 2026.
These changes impact employment practices, invoicing systems, and LLP profit distributions. Below is a practical overview to help you prepare.
1️⃣ Mandatory Stamping of Employment Contracts
From 1 January 2026, written employment contracts for employees earning more than RM3,000 per month are required to be stamped.
Key details:
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Stamp duty: RM10 per contract
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Deadline: Within 30 days of signing
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Applies to permanent, temporary, contract & fixed-term staff
While contracts with salaries RM3,000 and below are exempt from stamp duty, employers should still ensure proper documentation and submission where required.
2️⃣ Mandatory E-Invoicing for Businesses with Turnover Above RM1 Million
E-invoicing becomes mandatory from 1 January 2026 for businesses with annual turnover between RM1 million and RM5 million (based on FY2022).
Affected businesses should ensure:
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Proper invoicing systems are in place
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Compliance with IRBM technical requirements
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Staff readiness and internal process updates
3️⃣ 2% Tax on LLP Profit Distributions (YA 2026)
From Year of Assessment 2026, a 2% tax is imposed on LLP profit distributions exceeding RM100,000 per year.
LLP partners should review profit extraction strategies and personal tax planning accordingly.
Stay Prepared for 2026
With multiple compliance changes taking effect, early planning is key. We recommend reviewing your:
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Employment onboarding processes
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Invoicing systems
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LLP profit distribution arrangements
📞 Need assistance?
WhatsApp KS Chia & Associates at 011-2366 5233
📌 Disclaimer: This article is for general information only and does not constitute professional advice.
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