Latest Labuan Tax 2019
Labuan New Tax Legislation was introduced to all Labuan industry players with the recent meeting organized by Labuan Financial Services Authority (LFSA) in middle Jan 2019.
The Labuan IBFC’s new friendly tax introduction has been carefully crafted to boost export of Malaysia products and services. Labuan made it viable for all foreigners using one single entity in Malaysia to reach the international and Malaysia market, as opposed to holding two entities with two different tax treatment ie Labuan Tax and local Malaysia Income Tax Act 1967. For Malaysia entrepreneurs who like to start an export business, Labuan company is a perfect fit, a 3% tax rate with eligible to apply for tax certificate to proof your business!
The Latest Labuan Tax 2019 changes with effect from 1st January 2019 is as follows:
- The flat tax fee of RM20,000 is abolished for trading companies including all licensed entities.
- Dealing with Malaysia entities is allowed with a tax rate of 3%. The Malaysian companies which transact with a Labuan entity are entitled to a tax deduction on expenditure incurred, limited to 3% of the allowable expenditure, as opposed to 100% before.
- Investment holding remains as zero tax with the submission of yearly Management account
- Income from intellectual property assets held by a Labuan entity is subjected to the prevailing rate under the Income Tax Act 1967 of 24%.
- The new tax law also tackles the CRS requirement of commercial substance for tax proofing by introducing the needs of staffs and minimum spending, particularly for license entities and some special entities were introduced.
- Investment Holding of the Special Entities is the pure investment holding for subsidiaries structure, not the investment company holding assets ie properties, funds, etc.
What will affect you on your annual corporate tax filing?
The Latest Labuan Tax 2019 changes will take effect from 1st Jan 2019 (Year Assessment 2020), please take note of the followings:
- For Trading Company, your financial reporting will be a single tax rate of 3% and will b subjected to audit. If you have been paying a flat fee of RM20,000, you now need to appoint Labuan approved auditor for the 2019 accounts. For 2018 (Year Assessment 2019), you are still eligible to pay the flat tax of RM20,000.
- Investment Holding company remains unchanged at zero tax rate and submission of management account (without audit) is required.
- For Labuan license entities and special entities, please adhere to new tax guidelines of the requirement of staff employment and minimum annual spending.
Note: The above tax may be redefined if needed by the relevant authorities as it deems right from time to time.
Latest Labuan Tax 2019 download:
Labuan New Tax Rate 3% Legislation
Labuan Requirement for License Entities and Special Entities Legislation
CP TRUST is now part of TRICOR, we are now able to serve you the full range of services as follows to manage the needs to comply with the new tax changes:
Now that CP TRUST is part of TRICOR GROUP, we are glad to be able to provide a one-stop solution to assist all our clients from bookkeeping to tax advisory to tackle new Labuan tax law.
We have recently expanded our office space to a total of 10,000 sq ft to offer our clients rental solutions and with our full support team, we able provide Human Resource Solutions from recruitment, manage and payroll.
Tricor is also licensed accounting and tax agent, feel free to drop us an email should you need to meet us for tax advisory to restructure for your current set up and we offer affordable solutions to all our clients especially for those who like to switch over the accounting and audit services from your current provider at a very affordable price.
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