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Labuan Leasing Company Deductions Allowable for Malaysia Resident | Corporate Services Trust Co Ltd
The Impact to Labuan Leasing Company of the new Malaysia Finance Bill 2018 passed on 10 December 2018 The amended Finance Bill 2018 passed by the Dewan Rakyat on 10 December 2018 prescribe that a tax deduction will not be allowed on payments by Malaysian residents to Labuan companies, subject to any rules that may be prescribed by the Minister of Finance. It is expected that Labuan Financial Service Authority to release these Rules which will provide guidance on the conditions which need to be met in order for a deduction to be obtained. It is not yet known when the Rules will be released but at the time of writing it is understood that the below will be applicable. The Labuan leasing company has to establish substantial activities and perform strategic functions in Labuan. In this regard, the substance requirements should include but not limited to the following factors: (a) Physical presence: Maintain an operational office in Labuan. The operational office should be used for