Tax Benefits for The Labuan Entity

Tax Benefits

Labuan Entity can enjoy the following Tax Benefits:-

Labuan Business Activity Tax Act 1990 (“LBATA”)

No. Type of Income Tax Payable
1.

Non-trading activities

(Interest | investment returns including capital gains | dividends | royalty) Dividend payments | Trust distributions

 No Tax

 

2. Labuan trading activities Corporate tax rate of 3% of audited net profits
3. Payments to non-residents for interest | royalties | technical and management fees | rental payments for the use of movable property No withholding tax
4. Gross employment income of a non-citizen working in a managerial capacity in a Labuan financial institution until the year of assessment 2020 50% tax exemption
5. Labuan allowances and housing allowances of Malaysian citizens working in a Labuan financial institution until the year of assessment 2020 50% tax exemption
6. Director fees received by a non-citizen director of a Labuan financial institution, until the year of assessment 2020 100% exemption
7. Statutory income from Qualifying Professional Services provided by services providers (Accountants, Lawyers, Secretarial, Liquidators and Auditors) to Labuan entities 65% of the statutory income

Income Tax Act 1967 (“ITA”)
No tax on capital gains and foreign sourced income

Other Tax Benefits
a) No Stamp duty
b) No indirect taxes such as (i.e. Sales Tax | Service Tax | GST | VAT | Custom Duty)
c) No tax estimation i.e. no CP204 | no CP205