What happens if my Labuan company does not meet the substance test in a year?

It risks losing the 3% or 0% Labuan rate for that year and being taxed at a higher rate, and Labuan FSA may take action (confirm with your specialist). Check staff numbers and Labuan spending a few months before year-end, while there is still time to fix a gap. We review the figures with you each year before the tax return.

Accounting and audit

Source: Labuan companies: frequently asked questions, Labuan Financial Services Authority (Labuan FSA)