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.

 

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.