The Malaysian tax authority has been very active in monitoring taxpayer’s compliance with the applicable transfer pricing (“TP”) regulations in Malaysia. Taxpayers are required to determine and apply the arm’s length price for both local and cross-border intra-group transactions involving acquisition and supply of goods (including tangible and intangible goods), services and intra-group financing.
In relation to the BEPS action plan, MIRB is expected to be aligning its local laws with the various BEPS Action Plans.
How we add value
We help companies manage their transfer pricing issues through various services as follows:
Advisory and planning
- Diagnostic review and evaluation of existing intragroup financial arrangements from an arm’s length perspective; and
- Analysis of proposed intragroup financial arrangements and recommend TP regulations compliant pricing mechanism.
Benchmarking and preparation of TP documentation
- Conduct functional and economic analysis in order to select and apply the most appropriate method for benchmarking the intra-group transaction; and
- Preparation of strong and defensible TP documentation keeping in mind key considerations laid out in the TP regulations.
TP audit and litigation support
- Assistance in drafting appropriate defense arguments and submissions to relevant authorities; and
- Representation before tax and appellate authorities.
Advance Pricing Agreement (‘APA’)/ Mutual Agreement Procedure (‘MAP’)
- Conduct preliminary analysis to determine feasibility of unilateral or bilateral APA/ MAP; and
- Assistance in preparation of formal application and subsequent representations/ negotiations before the APA/ MAP authorities to resolve double taxation disputes.
BEPS action plan
- Conduct knowledge sharing sessions to increase awareness on the requirements of the three-tier TP documentation requirements i.e. Master File, Local File and Country-by-Country Reporting
- Diagnostic review to assess your readiness in respect of compliance requirements
The GTPS team is comprised of experienced professionals with proficiency in advising, preparing TP documentation, managing audit defense, and more with regard to a diverse set of TP issues in relation to:
- Companies consistently operating at a loss/ low profitability
- Intra-group services and cost contribution arrangements
- Intra-group financing arrangements including loans and guarantee transactions
- Royalty/ license fee benchmarking
- Business re-structuring
- TP issues relating to various industries including oil and gas, financial services, electrical and electronics, IT, automotive, commodities, telecommunication, FMCG