SCOPE OF TAX
Stamp duties are levied on a number of documents which is listed in Schedule 1 of the Stamp Act (Chapter 34) at an 'ad valorem duty' rate or 'fixed' rate. Instruments which are not duly stamped may not be admissible as evidence in civil proceedings.
1) Ad Valorem (i.e. according to the value) Duties are imposed on the following instruments:
- Instruments of transfer of property including marketable securities, shares of other companies and of non-tangible property, benefits to legal rights and goodwill;
- Instruments creating interests in property, for example Tenancies and Leases;
- Instrument of security for monies including instruments creating contracts for payment or monies of binding (generally described as "bond");
- Certain capital market instrument, for example, Contract Notes, Share Certificates, etc.
2) Fixed Duties are imposed upon:
- A number of other legal, commercial, mercantile or capital market instruments, for example instrument of Promissory Notes, Policies of Insurance etc; and
- A duplicate or a subsidiary or a collateral instrument when it can be shown that the original, principal or primary, instrument has been duly stamped.
With the consent of His Majesty the Sultan and Yang Di-Pertuan of Brunei Darussalam, the Government of His Majesty the Sultan and Yang Di-Pertuan has introduced the Stamp Act (Amendment) Order, 2017 effective from 4th May 2017. The amendment was to remove the requirements for Memorandum and Articles of Association and Share Certificates to be stamped for the purpose of incorporation.
ADJUDICATION OF INSTRUMENTS
A person may make an application to determine the amount of duty chargeable on any executed instrument to the Collector. For this purpose the Collector may require that the instruments be furnished together with affidavits or other supporting documents. The Collector may refuse such application until the required instrument and evidence have furnished accordingly;
When a person applies for the Collector's opinion to assess the stamp duty payable on his instruments, an adjudication fee of B$25.00 (Twenty Five Dollars) is charged for each instrument. The adjudication fee is still chargeable even if the applicant decides to withdraw his application after the Collector has assessed the stamp duty payable on his instruments;
The purpose of adjudication is to protect the parties to the contract in respect of the admissibility of the instrument in court during a civil proceeding. This is because an instrument which is not duly stamped is not admissible in court as evidence.
THE TIME OF STAMPING INSTRUMENTS
INSTRUMENTS EXECUTED IN BRUNEI DARUSSALAM
All instruments executed in Brunei Darussalam shall be stamped before being signed or executed.
INSTRUMENTS EXECUTED OUT OF BRUNEI DARUSSALAM
Instruments other than bills of exchange, cheque or promissory notes shall be stamped within 30 days after it has first been received in Brunei.
BILLS, CHEQUES, OR NOTES DRAWN OUTSIDE BRUNEI DARUSSALAM
Bills of exchange, cheque or promissory note drawn or made outside Brunei Darussalam and brought into Brunei Darussalam before it is stamped must affix the proper stamping before presenting the same for acceptance or payment or endorses or transfers or otherwise negotiates the same in Brunei Darussalam.
There shall be payable in addition to stamp duty a penalty as follows:
If after 14 days and within 3 months of execution or first receipt in Brunei Darussalam, double the amount of deficient duty or a penalty of B$10.00 (ten dollars), whichever sum is greater;
If after 3 months, 4 times the amount of deficient duty or a penalty of B$25.00 (twenty five dollars), whichever sum is greater.
However, instrument which is chargeable on or after 1 April 2013, the penalty is impose.
EXEMPTION FROM STAMP DUTY PAYMENT
According to the Section 30 of the Stamp Act (Cap 34) the following instruments are exempted from stamp duty:
a) Any instrument executed by or on behalf of or in favour of the Government in cases where, but for tis exemption, the Government would be liable to pay the duty chargeable in respect of such instrument;
b) Any instrument which relates exclusively to immovable property situated out of Brunei Darussalam or which relates exclusively to things to be done out of Brunei Darussalam.
Stamp duty on the following documents are also exempted from payment:
Any loan instrument through a financing facility for first house (including land) up to $250,000;
i) Any tenancy instrument for the rental of a house with rental of up to B$2,000; and
ii) Any instrument involving the transfer of property or shares between the owner and his dependent only, which is from husband to wife or wife to husband; and from father or mother to their children including adopted children that are registered (male or female).
EXAMPLES OF INSTRUMENTS LIABLE TO STAMP DUTY
The followings are examples of instruments which are charged at ad valorem duty:
Calculation for stamp duty, could refer to the First Schedule of the Stamp Act (Cap 34).
Principal (Primary) Security - $1.00 for every $500.00
Collateral – One-fifth the duty on principal security
LEASE / TENANCY AGREEMENT
For every $250.00 or part there of:
$1.00 for a period of not exceeding 1 year
$2.00 for a period exceeding one but not exceeding 5 years
$4.00 for a period exceeding 5 years or for any indefinite term
TRANSFER OF SHARES
Whether on sale or otherwise, to be computed on the price or value thereof on date of the transfer of such shares.
When the name of the transferee filled in: $0.10 for every $100.00 or part thereof;
When the name of the transferee is not filled in: $0.30 for every $100.00 or part thereof.