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