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Submission of tax returns for Labuan entities carrying on “other trading” activities
Following the gazettement of the Labuan Business Activity Tax (Requirements for Labuan Business Activity) Regulations 2021 [P.U.(A) 423/2021] on 22 November 2021 (Regulations), the Inland Revenue Board (IRB)’s Labuan Branch has issued a letter dated 29 November 2021 to the Association of Labuan Trust Companies. As the IRB now accepts that Labuan entities carrying on certain service activities (previously referred to as “other trading” activities) are able to submit their income tax return forms (ITRF) under the Labuan Business Activity Tax Act 1990 (LBATA) instead of under the Income Tax Act 1967 (ITA) effective from 1 January 2019 in line with the Regulations, the IRB has provided relevant Labuan companies with deadlines to decide on their tax filing positions and to submit the relevant ITRF or election forms to be taxed under the ITA, for the years of assessment (YAs) 2020 and 2021. Please see the Appendix to this Alert for an unofficial English translation of the Appendix to the IRB’s letter. As the Appendix is subject to interpretation and the next course of action may depend on the filing and technical positions adopted by the relevant Labuan entity previously as well as the activities carried on by the entity, affected Labuan companies should seek immediate advice on next steps.
The service activities outlined in Item 20 of the First Schedule of P.U.(A) 423/2021 are as follows:
i) administrative
ii) accounting
iii) legal
iv) backroom processing
v) payroll
vi) talent management
vii) agency
viii) insolvency-related
ix) management
Due date for submission of the ITRF APPENDIX
As the summary below is subject to interpretation and the next course of action may depend on the filing position and technical position adopted by the relevant Labuan entity previously as well as the activities carried on by the entity, affected Labuan companies should seek immediate advice on next steps.
|
Category |
Due date for submission of the ITRF |
Notes |
Contact person |
|---|---|---|---|
|
Entities that have submitted Form LE (LE 1, LE 4) under Code 23 |
15 December 2021 |
Labuan entities carrying on “other trading” activities that have submitted the Forms LE need not resubmit the ITRF |
1. Laura Helga Benard E-mail: laura.h@hasil.gov.my 2. Dayang Maimunah Awang Yusop Email: dayangmaimunah@hasil.gov.my |
|
Entities that have submitted Form LE (LE 1, LE 4) and Form C |
15 December 2021 |
Labuan entities carrying on “other trading” activities opting to be taxed under the ITA will need to make an irrevocable election by submitting the Form LE 3 to the IRB’s Labuan International Unit |
|
|
Entities that have submitted Form LE (LE 1, LE 4) under Code 23, and Form C |
15 January 2022 |
|
1. Hasmah Abd Latif E-mail: hasmah.a@hasil.gov.my
2. Mohamad Shahril Mohamad Sadik E-mail: mshahril@hasil.gov.my |