Ref: P.U. (A) 268/2012 | Date of Issue: 22 September 2026
The Inland Revenue Board of Malaysia (IRBM / LHDN) has issued an official clarification regarding the application of the Stamp Duty (Exemption) Order (No. 3) 2012 [P.U. (A) 268/2012] for Labuan entities.
Key Eligibility Requirements
To qualify for the stamp duty exemption under P.U. (A) 268/2012, both the instrument and the entity must satisfy the following conditions:
- Entity Definition: The instrument must be executed by a Labuan entity defined under subsection 2B(1) of the Labuan Business Activity Tax Act 1990 (LBATA).
- Qualifying Activity: The instrument must relate directly to a Labuan business activity as interpreted under Section 2 of LBATA and applicable regulations [P.U. (A) 423/2021 or P.U. (A) 482/2021].
- Substance Compliance: The entity carrying on the activity must comply with the prescribed substance requirements under P.U. (A) 423/2021 or P.U. (A) 482/2021.
Key Application Guidelines
- Newly Established Entities: Exemption may be considered for a newly established entity (including those extending their accounting period up to 18 months) during the relevant year of assessment without initial proof of substance compliance if the entity has not yet satisfied the requirements.
- Post-Period Documentation: Upon the end of the basis period for the relevant year of assessment, the entity must submit supporting documents to the IRBM (Labuan Stamp Duty Section) to confirm substance compliance.
- Compliance Audit & Penalties: If a subsequent review reveals that the Labuan entity failed to satisfy the substance requirements, the IRBM reserves the right to issue an additional assessment along with applicable penalties under Sections 36CA and 47A of the Stamp Act 1949.
Source: Stamp Duty (Exemption) (No. 3) Order 2012, P.U. (A) 268, Federal Government Gazette, 27 August 2012 (PDF).
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