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Beginning from the Year of Assessment (YA) 2025 (current year basis), the Self Assessment System (SAS) is introduced to Labuan entities undertaking Labuan business activities, in line with the amendment to the Labuan Business Activity Tax Act 1990 (LBATA 1990) via the Labuan Business Activity Tax (Amendment) (No. 2) Act 2024 [Act A1741].

The implementation of SAS aims to standardise the tax assessment system in Labuan to align with the systems under the Income Tax Act 1967 (ITA 1967) and the Petroleum (Income Tax) Act 1967.

There shall be two (2) Years of Assessment in 2025, namely:

1. YA 2025 based on a basis period ending in 2024 (previous year basis); and
2. YA 2025 based on a basis period ending in 2025 (current year basis).

YA 2025 based on the current year is a separate and subsequent assessment year following YA 2025 based on the previous year.

According to LBATA 1990, a Labuan entity shall:

1. furnish the return of profits via electronic medium or by way of electronic transmission [sections 5 and 10 of LBATA 1990] beginning YA 2025 (current year basis);
2. declare its income in the return of profits based on audited accounts [sections 5 and 10]; and
3. furnish correct particulars in the return of profits [paragraphs 5(3)(b) or 10(3)(b)].

Each Labuan entity is required to furnish to the Director General of Inland Revenue (DGIR) a return of profits and pay the tax payable or balance of tax payable within seven (7) months from the end of the accounting period which forms the basis period for the relevant YA.

The return of profits must be furnished to the DGIR in the prescribed form (Form LE1) through an electronic medium or by way of electronic transmission. Under the implementation of SAS, Form LE4 and LE5 are consolidated into Form LE1, and there is no longer a need for Statutory Declaration (Form LE4 / LE5) to be submitted by Labuan entities.

Please visit the MyTax Portal at https://mytax.hasil.gov.my. MyTax can be accessed using the roles of Director / Organisation Administrator, Representative of Director or Tax Agent (TAeF).

A return of profits furnished under section 5 of LBATA 1990 shall be deemed a notice of assessment, and the DGIR shall be deemed to have made the assessment on the date the return of profits is furnished.

A Labuan entity may be subject to action under section 23A of LBATA 1990 if it fails to furnish the return of profits on or before the due date. A 10% tax increase under section 11 of LBATA 1990 will be imposed if the tax payable or balance of tax is not paid on or before the due date.

Responsibility for submission of the return of profits lies with the responsible officer for compliance under section 16 of LBATA 1990.

Taxpayers may also appoint a licensed tax agent under section 153 of ITA 1967 for the purpose of furnishing the return of profits.

File Type

Form Type

Taxpayer Category

Due date for Submission of Return of Profits

Grace Period for Submission of return of profits and Payment of Balance of Tax (if any)

Availability of e-Filing

Guide Notes on Submission of Return of Profits

LE

e-LE1

Entiti Labuan

Within 7 months from the date following the close of the accounting period which constitutes the basis period for the year of assessment

1 month

15th August 2025

Refer to Guide Note

Note :

1. Beginning from the Year of Assessment 2025 (current year basis), pursuant to the provisions of section 22EB of the LBATA 1990, taxpayers who has furnished a return of profits in accordance with section 5 or 10 of LBATA 1990 are required to provide information and furnish documents as may be determined by the DGIR for the purpose of ascertaining the chargeable profits and tax payable, or net profits. This submission must be made via electronic medium or by way of electronic transmission within 30 days after the due date for furnishing of the return of profits.
2. Filing Programme For Documents Specified Under Section 22EB of the LBATA 1990 Through MITRS will be uploaded on the Official LHDNM Portal soon.
3. For the submission of the Return Form of Employer (Form E), please refer to the Filing Programme for Return Forms (BN) on the Official Portal of LHDNM.

Bil.

Subject

1. This grace period is granted by the IRBM to provide taxpayers with sufficient time to complete the submission of the return of profits and payment of tax payable or balance of tax payable in an orderly and accurate manner, in order to ensure a high level of compliance with the requirements of tax legislation.
2. A return of profits furnished via e-Filing and received within the granted grace period shall be deemed to have been furnished within the stipulated time pursuant to sections 5(1) and 10(1) of LBATA 1990.
3. The grace period also applies to the payment of tax payable or balance of tax payable as required pursuant to section 11 of LBATA 1990.
4. Failure to furnish the return of profits within the stipulated time may result in enforcement action being taken pursuant to the provisions of section 23A of LBATA 1990.

Example:

A Labuan entity closes its accounts on 31 December every year. The due date for submission of Form LE1 for YA 2025 (current year basis) is 31 July 2026. The grace period granted is until 31 August 2026 (1 month) for e-Filing (e-LE1) for YA 2025 (current year basis). If the taxpayer furnishes Form e-LE1 for YA 2025 (current year basis) on 12 September 2026, it will be deemed late from 1 August 2026 and may be subject to penalty pursuant to section 23A of LBATA 1990.

i) Definition of DORMANT for Labuan entiti :

1. has never commenced operations since the date of its incorporation;
2. has previously been in operation or carried on business but has now ceased operations or business; or
3. does not have any significant accounting transaction for one financial year prior to a substantial change (50% or more) in equity ownership. This means that there is no recording entry in the Labuan entities’ account other than the minimum expenses for compliance with stipulated statutory requirement. The minimum expenses referred to are as follows:
1. filing of the Labuan entities’ annual return to the Labuan Financial Services Authority (LFSA);
2. secretarial fee for filing of Labuan entities’ annual return;
3. tax filing fee;
4. audit fee; and
5. accounting fee.

ii) Labuan entities which :

1. are dormant are required to furnish the return of profits (including Form e-E).
2. own shares, real properties, fixed deposits and other similar investments and receive income (e.g., rent, interest) from those assets are not considered as dormant.
3. furnish false information shall be subject to fines / penalties pursuant to sections 23 and 23B of LBATA 1990.

iii) For e-Filing (e-LE1) submission by dormant Labuan entities, the following are mandatory fields:

Grace Period for the Payment of Tax / Balance of Tax

For assessments raised under subsection 6(2), (3) or (4), or where an assessment is increased under subsection 101(2) of the ITA 1967, the tax / balance of tax must be paid within 30 days from the date of assessment. Nevertheless, a grace period of 7 days is given.