Labuan: Domestic Corporate Taxation
A resident company paying dividends must deduct income tax at the current rate; however, a full imputation system is in operation. If the company has paid sufficient income tax on its own income, past or present, it may retain the tax deducted. Otherwise, the tax deducted must be paid to the government.
A non-resident company may distribute after-tax profits without incurring any additional liability. The tax deducted by the company satisfies the Malaysian tax liability of a nonresident shareholder; in the case of a resident shareholder, the credit is applied toward the shareholder's tax liability.
Dividends paid out of tax-exempt foreign income may be paid without deduction of tax.