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 |
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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 |
Chang Mei Seen |
Ivan Goh |
KPMG Tax Services Sdn Bhd
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