Malaysia legislation
Section 2B
Section 2B
(a)
shall be as specified in the Schedule; and
(b)
shall, for the purpose of the Labuan business activity—
Laws of Malaysia ACT 445
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(i)
in relation to a Labuan trading activity—
(A)
have an adequate number of full time employees in Labuan;
(B)
have an adequate amount of annual operating expenditure in Labuan; and
(C)
comply with any condition in relation to a fit and proper person for full time employees, as prescribed by the Minister by regulations made under this Act; and
(ii)
in relation to a Labuan non-trading activity—
(A)
have an adequate number of full time employees in Labuan;
(B)
have an adequate amount of annual operating expenditure in Labuan;
(C)
comply with any condition in relation to control and management in Labuan; and
(D)
comply with any condition in relation to a fit and proper person for full time employees, as prescribed by the Minister by regulations made under this Act.
(1A)
A Labuan entity carrying on a Labuan business activity which fails to comply with regulations made under subsection (1) for a basis period for a year of assessment shall be charged to tax at the rate of twenty four per cent upon its chargeable profits for that year of assessment.
(1B)
For the purposes of subsection (1A), the chargeable profits shall be the net profits as reflected in the audited accounts in respect of such
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Labuan business activity of the Labuan entity for the basis period for that year of assessment.
(1C)
The net profits referred to in subsection (1B) 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.
(1D)
Any income derived from intellectual property right referred to in subsection (1C) is subject to tax under the Income Tax Act 1967.
(1E)
In this section, “intellectual property right” has the same meaning assigned to it under subsection 4(5).
(2)
The Minister may, upon the recommendation of the Director
General, by order published in the Gazette, amend the Schedule including for the purposes of declaring any other person as a Labuan entity.