Malaysia Transfer Pricing Policy

Email: kul4ww@evershinecpa.com
or
Contact us by WeChat or Skype in the day-work-time of Malaysia  (GMT+8)
The Engaging Manager from Headquarter
Vivian Yee, ACCA, C.A. (M)
Skype ID: vivianyeeql;Wechat ID: vivianyeeql

TP-Q-10
Why kinds of scenarios will be adopted TP policy? What is the relevance between DTA and TP policy?

TP-A-10
When Malaysia Tax entity would like to pay out whatever Business profits, Royalty, Technical Services fees, Interests, Trading amount etc., it will adopt DTA tax rate. Its judge criteria, please see the Malaysia Treaty Page.

But if want to verify the above-mentioned amount if reasonable, will adopt Malaysia’s TP Policy.

TP-Q-20:   
在馬來西亞甚麼情況下, WFOE 外商投資企業不需要同時處理TP 申報和文件申報?
What are the scenarios in Malaysia, that a Wholly Foreign-Owned Entity (WFOE) is exempted from compliance of Transfer Pricing (TP) declaration and TP documentation?

TP-A-20:

Any conditions that fall outside the scope of the below conditions are exempted from preparing TP declaration and TP documentation.

1. Gross revenue (trade business) < RM 25million and total related part transactions < RM 15 million; or
2. Provision of financial assistance <RM 50 million.

TP-Q-30:   
在馬來西亞甚麼情況下, WFOE 外商投資企業需要向該國的稅務局發送TP 申報? 甚麼是申報單名稱?
What are the scenarios in Malaysia, that a Wholly Foreign-Owned Entity (WFOE) is required to submit TP declaration to the country’s tax bureau? What is the name of the TP declaration form?

TP-A-30:
CbCR Notification form – All taxpayers are required to submit together with the income tax return.

TP-Q-40: 
在馬來西亞甚麼情況下, WFOE 外商投資企業需要向該國稅務局發送TP 申請和文件? 甚麼 declaration 表單名和文檔名?
What are the scenarios in Malaysia, that a Wholly Foreign-Owned Entity (WFOE) is required to submit TP declaration and TP documentation to the country’s tax bureau? What is the name of the TP declaration form and TP documentation form?

TP-A-40:

CbCR Notification form – All taxpayers are required to submit together with the income tax return.
Local File – Gross revenue (trade business) > RM 25million and Related Party transactions > RM 15 million, Or provision of Financial Assistance > RM 50 million.
Master File – Consolidated UPC’s revenue > RM 3 billion in the previous year.
CbC Report – an Ultimate Parent Company in Malaysia that met all 3 conditions:

1. Consolidated UPC’s revenue > RM 3 billion in the previous year.
2. Cross-border transactions with CE in other tax jurisdiction.
3. The CE are incorporated or registered, and resident in Malaysia or any other jurisdiction.

Malaysia TRANSFER PRICING for professionals

Overview

The Malaysian Transfer Pricing Guidelines govern the standard and rules based on the arm’s length principle to be applied on transactions between associated persons.

IRBM does not accept Transfer pricing methods based on global formulary apportionment on the basis that they are arbitrary and could not reliably approximate arm’s length conditions.

This kind of apportionment is predetermined and uses mechanistic formula usually based on a combination of costs, assets, payroll, and sales to allocate the global profits of an MNE group among associated enterprises in different countries. This is not acceptable.
Transfer pricing rules in Malaysia apply to both cross-border and domestic related party transactions.
Taxpayers who are involved in controlled transactions are required to maintain transfer pricing documentation. This includes taxpayers of below:

1. Domestic controlled transactions where at least one party enjoys tax incentives or suffers from continual losses.
2. Taxes at different rates, such that the effect of that transaction would result in adjustments that alter the total tax payable.

Related Party

Any person, directly or indirectly or in a common control position, that has equity controls of more than 20% over the other party, and satisfaction on the following situations:

1. Business operations of that person depending on the proprietary rights of the other person.
2. Business activities of that person are specified by the other person and the prices and other conditions relating to the supply are influenced by such other person.
3. One or more of the directors or members of the BOD of a person are appointed by the other person.

Acceptable Transfer Pricing method

1. Comparable Uncontrolled Price (CUP)
2. Resale price
3. Cost-plus
4. Transactional profit split
5. Transactional net margin

Due dates and respective threshold:

Contact Us

Kuala Lumpur Evershine BPO Service Limited Corp.
E-mail: kul4ww@evershinecpa.com
or
Contact us by WeChat or Skype in the day-work-time of Malaysia  (GMT+8)
The Engaging Manager from Headquarter
Vivian Yee, ACCA, C.A. (M)
Skype ID: vivianyeeql;Wechat ID: vivianyeeql

or
For  how to exchange data files between your Finance Accounting System and Evershine Cloud Accounting Information System,
please send an email to HQ4kul@evershinecpa.com
Dale Chen, Principal Partner/CPA in Taiwan+Vietnam+UK will be accountable for your case.
Email address:dalechen@evershinecpa.com
linkedin address:Dale Chen

Additional Information

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(version: 2024/07)
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