About Labuan Business Activity Tax (Requirements For Labuan Business Activity) Regulations 2018 (Amendment) Regulations 2020

Dear Valued Clients,

Good day, this is Bona Trust support team.

Based on the latest P.U.A (375) dated 24 December, 2020 on Labuan Business Activity Tax (Requirements for Labuan Business Activity) Regulations 2018 (Amendment) Regulations 2020 (“the Amendment Regulations”), other trading activities under Code 23 of List of Codes and Types of Business Activity are not listed as part of the Amendment Regulations.

As such, Labuan Entity carrying other trading activities will not be deemed as Labuan Business Activity and will be subjected to tax under Income Tax Act 1967 (ITA) for year of assessment 2021 irrespective whether they comply with the Economic Substance Requirements or not.

However, the Association of Labuan Trust Companies together with the Labuan Corporation, the municipal government have sent an appeal to Ministry of Finance (“MoF”) to re-instate the business of general trading, provision of services and other non-listed activities to be taxed under Labuan Business Activity Tax Act 1990 (LBATA).

As of now, we are yet to receive any updates on the appeal submitted to MoF therefore, a Labuan Entity conducting other trading activities are not listed in the Amendment Regulations will remain status quo at this present moment. We will continue to update you when information becomes available.

While waiting on the appeal status, please do not hesitate to contact us if you wish to explore other alternative solutions; or if your Labuan Entity is carrying out any of the 22 types of business activity listed under the Amendment Regulations and you require assistance or guidance to meet the requirements.

Thank you.

Best Regards,
Support Team

* P.U.A is gazetted order. PU order is a piece of subsidiary legislation that has passed through parliament and has the force of law. PU stands for “Pemberitahu Undangan” or “Legal Notification”.