Tax Benefits in Labuan

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 Capital gains | foreign source income

Other Tax Benefits

  1. No Stamp duty
  2. No indirect taxes such as (i.e. Sales Tax | Service Tax | GST | VAT | Custom Duty)
  3. No tax estimation i.e. no CP204 | no CP205

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