Labuan Tax For Leasing Business

Labuan Leasing refers to the business of letting or subletting property on hire for the purpose of the use of such property by the hirer. It is business of letting many types of high value leasing propertyies which include machineries, equipments, boats, planes – movable and non-moveble items.

Key Tax Profile of Labuan Leasing Business:

* Corporate tax of 3% on net profit or pay maximum flat fee of RM 20,000
* No withholding tax on dividends, interest, management fee, royalty and technical fees
* No import duty, sales tax, GST, service tax for all international dealings
* For Malaysia dealing, 6% GST is applicable for annual revenue more than RM500,000 
* 0% personal income tax on Directors’ fee for foreign individual or corporate director
* 50% tax rebate on personal income of foreign professional employment
* 65% tax rebate on personal income of local Malaysians professional employment 
* No stamp duty on instruments on Labuan business activities, including transfer of shares
* No inheritance tax
* Able to access to more than 70 Malaysia’s tax treaty partners
* No foreign exchange control using Labuan offshore bankers
* No tax on interest earned for deposits placement in Labuan off shore banks
* Permitted to set up co-located office anywhere in Malaysia
* Permitted to deal with Malaysian residents with each transaction fee of RM20,000

Example 1

Labuan Tax for Leasing Business

Example 2

Labuan Tax for Leasing Business

Type of ComplianceReporting PartyDue Dates
Annual ReturnLabuan FSA1 month before anniversary of
Annual Company FeeLabuan FSA On and before anniversary of incorpn. date
Corporate Tax Inland RevenueBy 31st March, extendable to 31st May
Employer Return - Form EInland RevenueBy 31st March
Employee Return - Form BE/M for expatriates employmentInland RevenueBy 30th April
Audit ReportLabuan FSAWithin 6 months from closure date of financial account
Marketing Office Fee (if any)Labuan FSA-Fee RM7,500 By 15th Jan
Co-Located Office Fee (if any)Labuan FSA-RM10,000By 15th Jan
Leasing License FeeLabuan FSA-Fee RM60,000by 15th Jan
Statistical ReportingLabuan FSAFrom time to time

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