An agreement is a mutual understanding between two or more parties to do or not do something, which can be made in writing or verbally. Both written and verbal agreements are legally binding; however, written agreements have the advantage of stronger evidence compared to verbal agreements. If a dispute arises regarding the agreement, the parties have strong evidence regarding the terms that have been agreed upon.
In general, a written agreement is affixed with a stamp duty upon the signature of one of the parties to the agreement, which then raises the question of whether the affixation of the stamp duty becomes a requirement for the validity of the written agreement?
For an agreement to be considered valid, it must comply with the provisions of Article 1320 of the Civil Code.
In order for a valid agreement to occur, four conditions must be met:
- Agreement by those who bind themselves;
- Legal capacity to enter into an obligation;
- A certain subject matter;
- A lawful cause.
As long as the provisions of Article 1320 of the Civil Code are fulfilled, then the agreement is considered valid. So, what is the function of stamping a document in an agreement?
Based on UU No. 10 Tahun 2020 tentang Bea Materai, there are documents that are subject to stamp duty, namely:
“Article 3 paragraph (1)
- Documents created as a means to explain a civil event; and
- Documents used as evidence in court.”
The documents referred to in Article 3 paragraph (1) of the Stamp Duty Law include:
a. agreements, certificates, statements, or similar documents, along with their copies;
b. notarial deeds along with their originals, copies, and excerpts;
c. deeds made by Land Deed Officials along with their copies and excerpts;
d. securities in any name and form;
e. securities transaction documents, including futures contract transaction documents, in any
name and form;
f. auction documents including excerpts from auction records, minutes of auction records, copies of auction records, and originals of auction records;
g. documents stating amounts of money with a nominal value exceeding Rp5,000,000.00 (five million Indonesian Rupiah) which:
- mention money received; or
- contain acknowledgment that a debt, in whole or in part, has been paid off or settled; and
h. other documents stipulated by Government Regulation.
The function of stamp duty in written agreements is as proof of tax payment on documents that explain a civil event, in this case, agreements, so that the documents can be used as evidence in court, not as a requirement for the validity of the agreement. A written agreement that is not stamped with a stamp duty remains valid as long as it meets the provisions of Article 1320 of the Civil Code.