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Labuan, Royalty & IP rights taxed under ITA, Benefit tax under ITA
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Labuan
Tax incentive
exemption of 65% of SI
- professional service
- legal, accounting, financial & secretarial
exemption of 50% of employment inc
- non-citizen employed in managerial capacity
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exemption of 50% allowance recd by citizen
- housing & regional allowance
- exercising employment with public sector / Labuan entity
Tax treatment
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mixture
deemed carrying on Labuan trading actv, 3% / 24%
Labuan bs actv
- trading / non-trading actv carried in, from / through Labuan
- required to have substantial actv requirement
- adequate no. of FT em'ee served
- adequate amt of annual op expd incurred
checked every yr, if failed, taxed under LBATA @ 24%
Trading
- :red_cross:included in the list, taxed under ITA @ 24%
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Return & assessment
- filed by 31 Mac of each YA
- tax payment made simultaneously on date of submission of the forms
- 10% penalty for late payment
Trading
- Return of Pft
- Statutory Declaration
- tax payment of 3% of audited NP (after zakat)
excess rebate, :red_cross:refund, :red_cross:c/f, permanent loss
Non-trading
- Statutory Declaration only
False declaration
- fine <=RM1m
- imprisonment of 3 yrs
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Labuan entity carrying Labuan bs actv chargeable under LBATA, :red_cross:taxable under ITA
:check:make irrevocable election to be taxed under ITA
- 3 mths after BOBP for a YA
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- distribution by Labuan trust, :red_cross:taxable on beneficiaries
- :red_cross:WHT
- rental of moveable property
- Labuan co :red_cross:leasing co
- Labuan co :check:leasing co
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Benefit tax under ITA
- recog for tax treaty purposes (DTA)
- must ensure tax benefit outweigh additional tax
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