Commencement of amendments to the Labuan Business Activity Tax Act 1990
s 71
This Chapter comes into operation on 1 January 2019.
Finance Act 2018 chapter VI — AMENDMENTS TO THE LABUAN BUSINESS ACTIVITY TAX ACT 1990
Amendment of section 2
s 72
The Labuan Business Activity Tax Act 1990, which is referred to as the “principal Act” in this Chapter, is amended in subsection 2(1)— (a) by substituting for the definition of “Labuan business activity” the following definition: ‘ “Labuan business activity” means a Labuan trading or a Labuan non-trading activity carried on in, from or through Labuan, excluding any activity which is an offence under any written law;’; and (b) by deleting the definition of “Labuan entity”.
Amendment of section 2a
s 73
Section 2 a of the principal Act is amended by deleting subsection (2).
Amendment of section 2b
s 74
Section 2b of the principal Act is amended by substituting for subsection (1) the following subsection: “(1) The Labuan entities— (a) shall be as specified in the Schedule; and (b) shall, for the purpose of the Labuan business activity, have— (i) an adequate number of full time employees in Labuan; and (ii) an adequate amount of annual operating expenditure in Labuan, as prescribed by the Minister by regulations made under this Act.”.
Amendment of section 4
s 75
Section 4 of the principal Act is amended by inserting after subsection (2) the following subsections: “(3) For the avoidance of doubt, the net profits referred to in subsection (2) shall not include any income derived from royalty and other income derived from an intellectual property right if it is receivable as consideration for the commercial exploitation of that right. (4) Any income derived from intellectual property right referred to in subsection (3) is subject to tax under the Income Tax Act 1967. (5) For the purpose of this section, “intellectual property right” means a right arising from any patent, utility innovation and discovery, copyright, trade mark and service mark, industrial design, layout-design of integrated circuit, secret processes or formulae and know-how, geographical indication and the grant of protection of a plant variety, and other like rights, whether or not registered or registrable.”.
Deletion of section 7
s 76
The principal Act is amended by deleting section 7.
Substitution of section 8
s 77
The principal Act is amended by substituting for section 8 the following section: “Absence of basis period 8. Where a Labuan entity carrying on a Labuan business activity which is a Labuan trading activity does not have a basis period for a year of assessment, the Director General may direct that the basis period for that year of assessment and subsequent years of assessment to include a period or periods (which may be of any period) as specified in the direction.”.
Amendment of section 8a
s 78
Subsection 8a(1) of the principal Act is amended by deleting the words “, 7 or 8”.
Substitution of section 11
s 79
The principal Act is amended by substituting for section 11 the following section: “Payment of tax 11. A Labuan entity shall, at the time of filing of the statutory declaration and return of its profits for a year of assessment under section 5, make full payment on account of— (a) tax to be charged for that year of assessment; or (b) tax to be charged for that year of assessment after reduction of rebate under section 8a.”.
Amendment of section 12
s 80
Section 12 of the principal Act is amended by substituting for the words “paragraph 11(a)” the words “section 11”.
Amendment of section 23
s 81
Paragraph 23(b) of the principal Act is amended by deleting the words “7, 8 or”.
Amendment of section 25
s 82
Section 25 of the principal Act is amended by deleting the words “, 7, 8”.
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Source: Laws of Malaysia, Attorney General's Chambers of Malaysia (lom.agc.gov.my). Not a copy of the Gazette printed by the Government Printer (Interpretation Acts 1948 and 1967, s 61).
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