The objective of this guideline is to provide clarification on the tax treatment of Labuan entities with dormant status under the Labuan Business Activity Tax Act 1990 [Act 445] as prescribed through the Labuan Investment Committee (LIC) Pronouncement 1-2019 and 2-2019 dated 19 June 2019 and 11 December 2019, respectively.
Labuan entity is considered dormant if it:
(i) Filing of the company’s annual return;
(ii) Secretarial fee for filing of the company’s annual return;
(iii) Tax filing fee;
(iv) Audit fee; and
(v) Accounting fee.
Labuan entity is NOT considered as dormant if it owns shares, real properties, fixed, deposits, and other similar investments including income such as rents, interest, etc. (if any) received by virtue of the mentioned ownership.
Labuan entities that are dormant or struck off, including those under winding up proceedings or under liquidation process, which do not derive any source of income need not comply with substance requirements. However, if Labuan entities resume operations, substance requirements must be complied with until the last date of the accounting period.
The responsibilities of Labuan entities that are dormant under Act 445 are as follows:
Documents to be Submitted
Dormant / under liquidation process
•Audited accounts (if any) / management accounts
Deemed effective from Year of Assessment 2020.
Tax consulting is the core service of ANC Group. Our tax professionals provide clients with comprehensive tax support and guidance. We offer tax consulting and compliance services for expatriates, entrepreneurs, and listed and non-listed companies.
Our tax consulting services include business tax, transaction tax, personal tax, and corporate income tax. We don’t just guide you in interpreting and applying complicated taxation rules, but to explore new opportunities and business trends.
We keep you abreast with Malaysia tax updates and any changes in the local regulations.
We work closely with industry specialists, authorities, and associated professionals within ANC Group to provide the best-in-class integrated tax planning solutions. ANC specialists coordinate the accounting and taxation services to bring your business to success.