Malaysia: Revised Labuan business activity tax requirements

The Labuan business activity tax regulations replaces the regulations from 2018

The Labuan business activity tax regulations replaces the regulations from 2018

The “Labuan Business Activity Tax (Requirements for Labuan Business Activity) Regulations 2021” were published in the official gazette on 22 November 2021 to replace the regulations from 2018. 

Among the changes included in the 2021 Regulations are the following:

  • Expansion of the list of Labuan* business activities to include “other trading activity” (e.g., administrative services, accounting services, legal services, backroom processing services, payroll services, talent management services, agency services, insolvency-related services, and management services other than Labuan company management)—retroactive effective date of 1 January 2019.
  • Addition of management and control requirements for a Labuan entity that undertakes pure equity holding activities—retroactive effective date of 1 January 2021.

Read a November 2021 report prepared by the KPMG member firm in Malaysia

*Labuan refers to a special economic zone and the related tax (and other) incentives.


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