Assessibility of received from Labuan offshore activities


the ITA 1967 ‡ Foreign sourced income received in Malaysia by a resident individual is exempted. . ‡ Non-citizen individuals acting in the capacity of a director of an offshore company are exempted from payment of income tax in respect of directors fees received from Y/A 2007 until Y/A 2010. provided the employment is exercised in Labuan. ‡ Expatriates employed in a managerial capacity in Labuan by offshore companies or trust companies are granted an exemption of 50% of their income from such employment up to Y/A 2010.Individuals ‡ Subject to tax under the Principal Act. ‡ A citizen of Malaysia is exempted from the payment of income tax on 50% of the gross housing and Labuan Territory allowances received by that citizen from exercising an employment in Labuan with the Federal or State Government. a statutory body or an offshore company from Y/A 2006 until Y/A 2010.

if election is made. 000. ‡ Capital gains arising from sale of shares in an offshore company by the shareholders are not taxable assuming that the shareholders do not have the business presence in Malaysia and are not investment dealers. However. capital gains are reflected as part of the net profits and hence subjected to 3% tax.Capital gains ‡ For an offshore company carrying on an offshore trading activity. . the liability is restricted to RM20.

interest and technical or management fees paid by an offshore company to a non-resident person or another offshore company are exempted from income tax and thus not subject to withholding tax. with the exception of offshore banks or offshore companies carrying out leasing business. However rental of moveable property paid to a nonresident person does not enjoy this exemption. . ‡ Any interest paid by a Malaysian resident to offshore banks in Labuan is not subject to withholding tax.Withholding taxes ‡ Royalties.

Indirect taxes ‡ There are no indirect taxes (such as sales taxes. . services taxes and custom duties) since Labuan enjoys free port status.

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