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Stay compliant with Malaysia's Income Tax Act 1967. Expert support for IRBM (LHDN) audits, documentation, and the rigorous 14-day submission rule.
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Transfer pricing in Malaysia is governed by Section 140A of the Income Tax Act 1967 and the Transfer Pricing Rules 2023. The Inland Revenue Board of Malaysia (IRBM) requires taxpayers to prepare contemporaneous documentation prior to the tax return filing deadline.
Under current law, taxpayers must be able to submit their full TP documentation within 14 days of a request by the IRBM. Non-compliance results in automatic surcharges and heavy penalties under Section 113B.
The statutory power for the Director General of Inland Revenue to adjust transaction prices to reflect the arm's length principle.
Revised guidelines introducing more stringent documentation requirements and refining the definition of "contemporaneous."
Strict fines ranging from MYR 20,000 to MYR 100,000 for failure to furnish TP documentation upon request.
Mandatory for large-scale business operations.
Full documentation is required for companies with:
Gross income > MYR 25 Million
Related party transactions > MYR 15 Million
For financial assistance, the threshold is related party interest exceeding MYR 50 Million.
Simplified reporting for smaller business entities.
Companies falling below the full documentation thresholds are still required to prepare simplified or "limited" documentation.
This ensures that the arm's length nature of their transactions is documented, albeit with a less intensive functional and economic analysis.
Filing for groups exceeding MYR 3 Billion.
MNE groups headquartered in Malaysia with a total consolidated group revenue of MYR 3 Billion or more must file a CbCR.
Notifications must be submitted to the IRBM on or before the last day of the reporting financial year.
Strategic support and representation during IRBM field audits.
Economic analysis using Malaysian and ASEAN database sets.
Negotiating Advance Pricing Agreements for long-term certainty.
DEMPE analysis for royalties and licensing arrangements.
The 14-day rule leaves no room for error. Partner with HexaTP for contemporaneous readiness.
Contact Kuala Lumpur TeamFor further information on transfer pricing please contact:
