00:00The Court of Appeal has ruled that parties to an asset sale cannot avoid paying ad valorem stamp duty
00:06by structuring the deal so that legal ownership passes at a later date.
00:11A three-member bench held that an agreement for the sale of 16 telecommunications towers
00:16amounted to a conveyance on sale under Section 2.1.1 of the Stamp Act 1949,
00:23making it liable to ad valorem duty.
00:27Justice Firuz Jafril said the timing of completion was irrelevant
00:30where the agreement was in substance for the sale of property
00:34as the parties clearly intended for title in the towers to pass to GTP network Sedian Berhad.
00:40The dispute arose after GTP purchased the 16 towers from Miba Holdings for RM15 million
00:46with the collector assessing RM584,020 in ad valorem duty, which GTP disputed,
00:55arguing the agreement merely contemplated a future transfer attracting only RM10 nominal duty.
01:03The Court relied on the Federal Court's 2025 ruling in Harvey Logistics v. Pemungot Duties Setem,
01:10which held that an instrument need not affect an immediate transfer of title
01:14before attracting ad valorem duty.
01:18Firuz said accepting GTP's argument would allow parties to dodge higher duty
01:23merely by stating that title would pass at a future date, contrary to Parliament's intent.
01:29The bench ordered GTP to pay RM30,000 in costs.
01:34I'm Radeep Gail, FMT.
01:36I'm Radeep Gail, FMT.
Comments