Labuan Company Withholding Tax

Withholding tax is an amount withheld by the party making payment on income earned by non-resident individuals or companies and the withheld amount is then remitted to Inland Revenues Board of Malaysia. This tax system is applicable to local Malaysia Sdn Bhd Company but not Labuan Company. Labuan tax law has approved to exclude withholding tax to be imposed onto all Labuan entities. More about Labuan tax benefits, please click here!

Classification of Withholding Tax as follows:

  • Technical Fee 10%
  • Management Fee 10%
  • Royalties 15%
  • Public Entertainment 15%
  • Speaking Fee 10%
  • Interest 15%

Labuan-Withholding-Tax

1. Local Malaysia Sdn Bhd Company issue payment to Labuan Company not subject to
Withholding Tax

2. Labuan Company dealing with Malaysian required to report to Labuan FSA
3. Labuan Company makes payment to Singapore Company and Indonesia Company – no withholding tax.

Malaysia Double Tax Agreement Treaty can be applied and will supersede WHT for the same classification. Good to consult with your tax consultant if you have a complex company structure before you set up your Labuan Company.

Call on us send email us your enquiry for advise on your business nature if Labuan company able to meet your objective in Malaysia!