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Labuan Tax Exemption Guide

The document discusses various tax exemptions available for Labuan entities under Malaysian law. Labuan entities are exempt from income tax on dividends paid to residents or non-residents, as well as dividends received from domestic companies paid from Labuan dividends. Directors' fees paid to non-citizens and distributions from Labuan foundations and partnerships to beneficiaries and partners are also fully exempt from tax. Labuan entities face no withholding tax on interest, lease rentals, technical or management fees, royalties, or distributions paid to non-residents. Qualifying professional services provided to Labuan entities in Labuan may be 65% exempt from income tax.

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230 views3 pages

Labuan Tax Exemption Guide

The document discusses various tax exemptions available for Labuan entities under Malaysian law. Labuan entities are exempt from income tax on dividends paid to residents or non-residents, as well as dividends received from domestic companies paid from Labuan dividends. Directors' fees paid to non-citizens and distributions from Labuan foundations and partnerships to beneficiaries and partners are also fully exempt from tax. Labuan entities face no withholding tax on interest, lease rentals, technical or management fees, royalties, or distributions paid to non-residents. Qualifying professional services provided to Labuan entities in Labuan may be 65% exempt from income tax.

Uploaded by

ewinze
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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11/28/2014

LabuanTaxExemption
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Labuan Tax Exemption


The following exemptions are available for the Labuan entities under the Income Tax Act 1967.
Dividends paid to a resident or a nonresident person by a Labuan entity.

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Dividends received from a Malaysian domestic company, which are paid out of dividends received
from a Labuan entity.
100% tax exemption on fees paid to a noncitizen Director.
Distribution by Labuan foundation and partnerships to beneficiaries and partners.
Labuan entities are exempted from withholding tax on the following:

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Name *

Interest paid to a resident person or a nonresident who is not engaged in the business of banking,
finance or insurance in Malaysia.

Email Address *

Interest paid to a nonresident person or another Labuan entity.


Lease rental paid to nonresident by a licensed Labuan leasing entity.

Home Country *

Technical or management fee paid to a nonresident or another Labuan entity.

Age Group *
Royalty to a nonresident person or another Labuan entity.
Payment of fees paid to a nonresident under Section 4(f) of Income Tax Act 1967.
Distributions made by a Labuan trust to nonresident beneficiaries.

Below 50 years old


50 years old and above

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Distributions made by a Labuan foundation or a Labuan Partnership to the beneficiaries and partners

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Labuan Tax Exemption for Qualifying Professional


Services and Employment
Any person or his employee or a company rendering qualifying professional services to a Labuan
entity in Labuan is exempted from income tax of up to 65% of the statutory income. Qualifying
professional services includes legal, accounting, financial and secretarial services.

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Noncitizens employed in a managerial capacity in a Labuan entity, working in Labuan and

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colocated / marketing office (as approved by Labuan FSA) enjoy an income tax exemption

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of up to 50% of gross employment income.


50% tax exemption on Labuan and housing allowances paid to Malaysian employee working in a
Labuan entity.

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Stamp Duty Exemption

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All documentation executed by any Labuan entity in relation to Labuan business activities
(including M&A and transfer of shares of a Labuan company and constituent documents of a
Labuan trusts, partnerships and foundations) are exempted from payment of stamp duty.

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For more information, please visit http://www.labuanfsa.gov.my

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Interested to apply for MM2H, send us an enquiry by clicking here.

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