• Service: Tax, Global Transfer Pricing Services, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 5/6/2014

Malaysia - Transfer pricing documentation required for 2014 tax return 

May 6: The Malaysian Inland Revenue Board has been active in monitoring taxpayer compliance with section 140A and the transfer pricing rules and guidelines. In addition to transfer pricing audits, there has been a three-fold increase in the issuance of Form MNE to groups of companies.

In a further effort to enhance compliance with transfer pricing requirements, the 2014 tax reform form (Form C) now contains a new check box (Box R4) for use by corporate taxpayers to declare whether their transfer pricing documentation has been prepared—thus signaling the possible introduction of a formal transfer pricing return in the future.

KPMG observation

Companies that are engaged in related-party transactions need to assess their level of transfer pricing compliance and prepare contemporaneous transfer pricing documentation before the applicable filing deadlines for their tax returns (i.e., seven months from the close of the financial year, plus any extensions if granted by the Inland Revenue Board).

For example, taxpayers with a January financial year-end need to have their transfer pricing documentation in place by the August 2014 filing deadline for their tax returns, so as to be able to report affirmatively that the appropriate documentation has been prepared.

Experienced transfer pricing professionals report that it can take between six to eight weeks to prepared good quality transfer pricing documentation.

Read a May 2014 report [PDF 64 KB] prepared by the KPMG member firm in Malaysia: Malaysia Transfer Pricing Update – 2014 Tax Return

Contact a tax professional with KPMG's Global Transfer Pricing Services.

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