Malaysia: Updated guidelines for transfer pricing | KPMG | GLOBAL

Malaysia: Updated guidelines for transfer pricing

Malaysia: Updated guidelines for transfer pricing

The Malaysian Inland Revenue Board announced new updates and changes to the Transfer Pricing Guidelines 2012. For taxpayers engaged in controlled transactions with related parties or associated person(s), this updated guidance now incorporates measures as to how taxpayers are to manage and document their intercompany transactions.

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The updated version of the guidelines introduces changes to the following chapters or introduce new chapters: 

  • Chapter II – The arm’s length principle (updated)
  • Chapter VIII – Intangibles (updated) 
  • Chapter X – Commodity transactions (new) 
  • Chapter XI – Documentation (updated) 

The updated chapters are available on the Inland Revenue Board’s website

KPMG observation

The updated guidelines essentially realign the existing transfer pricing standards to that of BEPS Actions 8 - 10 (Aligning transfer pricing outcomes with value creation) and BEPS Action 13 (Transfer pricing documentation and country-by-country reporting) of the Organisation for Economic Cooperation and Development’s base erosion and profit shifting (BEPS) project. The release of the updated guidelines is being viewed as another step by the tax authorities to reinforce transfer pricing compliance by taxpayers, following the introduction of the Income Tax (Country-by-Country Reporting) Rules 2016, late last year. 

 

Read a July 2017 report [PDF 406 KB] prepared by the KPMG member firm in Malaysia

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