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Labuan: Domestic Corporate Taxation

Calculation of Taxable Base

Expenses which are incurred wholly and exclusively in the production of income are deductible for the purposes of determining chargeable income.

Allowable deductions include the following:

  • interest on loans, rental payments, expenses for repairs of premises, plant and equipment or fixtures or for the renewal, repair or alteration of equipment employed in the production of income;
  • irrecoverable trade debts which are specifically identified;
  • a justifiable share of regional or head office revenue expenses for non-resident companies;
  • legal expenses incurred in debt collection and renewal of lease of premises; and
  • capital allowances for fixed assets at pre-determined rates.

Business losses may be set off against income derived in the year in which the loss is incurred and may be carried forward, but not back.



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