14 days to submit Transfer Pricing ("TP") Documentation

We wish to share with you the latest development on TP in Malaysia.

The Malaysian Inland Revenue Board ("IRB") recently updated Paragraph 11.2.3 and 11.3.5 in Chapter XI - Documentation of the Malaysian TP Guidelines as follows:

New Paragraphs / Amendments

Paragraph 11.2.3

Submission of TP Documentation

The TP Documentation is not required to be submitted with the annual Return Forms. However, the documentation should be made available within 30 days upon request by the IRB.

With the introduction of Section 113B of the ITA 1967 which comes into operation on 1 January 2021, the TP Documentation should be made available within 14 days upon request by the IRB. This requirement will apply to TP audit cases which have commenced on or after 1 January 2021. 

Paragraph 11.3.5

Penalty

Penalty will not be imposed in cases, where:

(a)   TP Documentation is submitted within 30 days upon request by the DGIR for TP audit cases which have commenced before 1 January 2021; or

(b)   TP Documentation is submitted within 14 days upon request by the DGIR for TP audit cases which have commenced on or after 1 January 2021; and

(c)   The TP Documentation prepared fulfils the requirement of the Rules and these Guidelines, wherein reliable and correct information is provided by the taxpayer.

Please click on the above header link to access the updated Chapter XI - Documentation at the IRB's website.

Following this amendment, taxpayers will now have 14 days, instead of 30 days, to submit TP Documentation upon IRB's request. With a shorter timeframe, it is important for taxpayers to ensure that their TP Documentation is up-to-date and complying with the requirements under the Malaysian TP Rules and Guidelines. A considerable amount of time is usually required to prepare a good quality TP Document and therefore this process should start as early as possible.

Further, with the shorter timeframe of 14 days, we understand that the IRB will also be updating the TP Audit Framework to reflect this change.

Should you have any questions or require further clarification, please do not hesitate to email or contact any of our Executive Directors, Directors, Associate Directors or Managers whom you are accustomed to dealing with or who are responsible for the tax affairs of your organisation.

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

Regards,

Bob Kee
Executive Director
Head of Transfer Pricing 

Chang Mei Seen
Executive Director
Transfer Pricing 

Ivan Goh
Executive Director
Transfer Pricing 

KPMG Tax Services Sdn Bhd

For more information on our core service offerings, please contact:

Petaling Jaya Office

Tai Lai Kok
Executive Director -
Head of Tax and Head of Corporate Tax
ltai1@kpmg.com.my
+ 603 7721 7020

Long Yen Ping
Executive Director -
Head of Global Mobility Services yenpinglong@kpmg.com.my
+ 603 7721 7018

Bob Kee
Executive Director -
Head of Transfer Pricing
bkee@kpmg.com.my
+ 603 7721 7029

Ng Sue Lynn
Executive Director -
Head of Indirect Tax
suelynnng@kpmg.com.my
+ 603 7721 7271

Soh Lian Seng
Executive Director -
Head of Tax Dispute Resolution
lsoh@kpmg.com.my
+ 603 7721 7019

 

Outstation Offices

Penang Office

Kuching & Miri Office

Evelyn Lee
Executive Director -
Penang Tax
evewflee@kpmg.com.my
+604 238 2288 (ext. 312)

Regina Lau
Executive Director -
Kuching & Miri Tax
reglau@kpmg.com.my
+6082 268 308 (ext. 2188)

Kota Kinabalu Office

Johor Bahru Office

Titus Tseu
Executive Director -
Kota Kinabalu Tax
titustseu@kpmg.com.my
+6088 363 020 (ext. 2822)

Ng Fie Lih
Executive Director -
Johor Bahru Tax
flng@kpmg.com.my
+607 266 2213 (ext. 2514)

Ipoh Office

 

Crystal Chuah Yoke Chin
Tax Manager -
Ipoh Tax
ycchuah@kpmg.com.my
+605 253 1188 (ext. 320)