The tax advantages of Labuan companies at a glance:
- Zero Sales Tax and No Government Service Tax for Labuan Company.
- Zero Goods & Service Tax (GST) or Value Added Tax (VAT) for Labuan Company.
- Zero Capital Gain Tax.
- No Withholding Tax for payment out of Labuan
- Zero tax on dividend in Malaysia.
- Zero Stamp Duty for the execution of certain instruments related to the operations of Labuan Company such as M&A and Share Transfer Form.
- 50% Exemption on Gross Employment Income received from Labuan Company by Non-Malaysian Citizen in Managerial capacity in Labuan.
- 50% Exemption on Gross Housing Allowance and Labuan Territory Allowance received by Malaysia Resident exercising employment in Labuan for a Labuan Company.
Income Tax Exemption Order for Labuan Company
Income Tax (Exemption) (No.6) Order 2011 [P.U. (A) 418/2011]
65% of the statutory income derived by any person form the provision of qualifying professional services (i.e. legal, accounting, financial or secretarial services) rendered in Labuan to a Labuan entity (as specified in the Schedule to Labuan Business Activity Tax Act 1990 [Act 445]), is exempted from income tax from year of assessment (YA) 2011 to YA 2020.
Income Tax (Exemption) (No.7) Order 2011 [P.U.(A) 491/2011]
Fees received by an individual non-Malaysian citizen as a director of a Labuan entity are exempted from income tax from YA 2011 to YA 2020.
Income Tax (Exemption) (No.8) Order 2011 [P.U (A) 420/2011]
50% of the gross employment income received by an individual non-Malaysian citizen in a managerial capacity with a Labuan entity in Labuan.
Income Tax (Exemption) (No.9) Order 2011 [P.U. (A) 421/2011]
50% of the gross housing allowance and gross Labuan Territory allowance received by an individual Malaysian citizen from exercising an employment in Labuan with a Labuan entity is exempted from income tax from YA 2011 to YA 2020.
Labuan Tax Information & Labuan Corporate Tax Structure
- The financial year end for Labuan companies is 31st December every year.
- We will assist the Labuan Company to open corporate tax file (Form C)
- The Labuan Company may appoint the Labuan Trust Company as the Tax Agent
- We will assist the Labuan Company to file their yearly tax filing with Inland Revenue Board (IRB) or Lembaga Hasil Dalam Negeri (LHDN)
- The dateline for Labuan Tax submission is 31st March annually after the year end of previous year ended 31 December and may be extended subject to IRB approval