Perhaps one of the areas which is most commonly overlooked and often neglected is the requirement to prepare accounting records and where applicable to audit the company’s accounts. In most cases even if a company is not required to pay tax under the prevailing laws there will normally be a requirement that the company prepares or maintains account which can clearly demonstrate the company’s financial position. Not to do so not only may amount to non-compliance but also compromise the company’s standing.

 

From our experience accounting work is rarely expensive and we work with a number of qualified accountants to provide accounting services to your company.

Through our network of qualified accountants, we can offer weekly, bi-weekly, monthly or yearly accounting regular reporting services. Our accounting services covers all aspects of accounting and bookkeeping, including:-

  • Entry of transactions.
  • General Ledger.
  • Assets /Equipment Ledgers.
  • Expenses Ledger.
  • Accounts Receivables.
  • Accounts Payables.
  • Ageing Report & Summaries.
  • Bank Reconciliation.
  • Financial Statements Preparation.
  • Trial Balance.
  • Income Statement (Profit & Loss).
  • Balance-sheet.
  • Cash Flow Statement.
  • Periodic/Annual Reports.

 

The accountants are familiar with most industry standard software applications, and if required, we can work with other applications also. With our knowledge and experience in Bookkeeping and Accounting procedures we provide our service for all your Bookkeeping and Accounting needs, whether Computerised or Manual.

We also with a few well established audit firms through which speedy and cost effective auditing may be performed.

Account & audit: A Labuan company must keep its financial records which clearly show its financial position. This would mean keeping accounts up to trial balance at least. If your company is an investment holding one, there is no need to appoint an auditor. Where the company is a trading one and payment of 3% tax is to be made, then an audited account must be submitted and thus appointment of auditor is necessary. You may prepare the account and if you need us to introduce you to accountant familiar with Labuan company matters we can do so.

Appointment of auditor: If your company is a trading company AND wishes to pay only 3% tax, an auditor must be appointed. This auditor must be “an approved auditor” the list of which could be given on your request.

Taxation: Taxation of Labuan company is on worldwide basis for company that carries on “trading activity” for a certain year of assessment. Company carrying “non-trading activity” is not chargeable to tax. The term “non-trading activity” refers to activity relating to the holding of investments in securities, stock, shares, loans, deposits and immovable properties by an company on its own behalf. The term “trading activity” refers includes banking, insurance, trading, management, licensing or any other activity which is not non-trading activity.

If your company is a trading company, it is liable to pay 3% or RM20,000.00 tax on net profit, which ever is elected. If 3% is elected then audited accounts need to be filed, in which case we can assist you in appointing an approved auditor. Where the flat rate of RM20, 000.00 is chosen there is no need to file audited accounts. However there is still a requirement that the company should maintain adequate financial records.

Tax filling is made every year on or before 31st of May. If an extension is required, it must be applied at least one month before 31st of May. We will assist you in this application.

If your company is an investment holding or remains dormant no tax need to be paid, in which case we will file tax return for a dormant company.

A Labuan company is now allowed to elect to be taxed under the ITA 1967 and pay tax at the rate of 26%. This will enable the company to derive benefits from Malaysia’s numerous DTTs. This election is irrevocable and if made will subject the company to all provisions under the ITA. Customers are advised to seek proper international tax advice before implementing this tax structure.

Nature of businessTaxing statuteTax rateWhen tax payable?Is account required?Filing of a/c with IRBFiling of a/c with Lofsa
LC as Trading CompanyThe term "trading activity" includes banking, insurance, trading, management, licensing or any other activity which is not a non-trading activity.Labata [1]19903% or RM20kOn or before 31st May every yearYESYES of paying 3%/NO if paying RM20kNO/YES
LC as Non-trading companyThe term "non-trading activity" refers to activity relating to the holding of investments in securities, stock, shares, loans, deposits and immovable properties by a Labuan company on its own behalf.Labata 1990NILN/AYESNONO/YES
LC electing to be taxed under ITA 1967Applies to trading and non-tradingITA[2] 196726%Advance tax payable monthlyYESYESNO/YES


1. Labuan Business Activity Tax Act 1990

2. Income Tax Act 1997