Three Positive Developments, Four Heightened Compliance Obligations, and Five Unresolved Issues
Between May 2023 and December 2024, the Inland Revenue Board of Malaysia (IRBM) issued three interlocking instruments that now govern transfer pricing:
- The Income Tax (Transfer Pricing) Rules 2023
- The Malaysian Transfer Pricing Guidelines 2024 (MTPG 2024)
- The Transfer Pricing Tax Audit Framework 2024 (TPAF 2024)
Together, these documents tighten documentation standards, introduce safe harbours, and impose new penalties -- most notably the Section 113B administrative penalty for late, incomplete, or absent transfer pricing documentation. TPAF 2024 grants a transitional concession that ends with financial years ending on 31 May 2024; from that point onward, the administrative penalties are applied on a tiered basis according to the number of days’ delay in furnishing complete transfer pricing documentation.
In particular, the largest wave of affected taxpayers was companies with a 31 December 2024 year-end, because most Malaysian groups close their books in December. For those taxpayers:
- The corporate income tax return (Form C) for YA 2024 was due on 31 July 2025
- Taking into account IRBM’s customary one-month grace period, the practical filing deadline was 31 August 2025
- Contemporaneous transfer pricing documentation—full or minimum -- must therefore be brought into existence, dated and outcome-tested before 31 August 2025
The discussion that follows highlights three measures that ease compliance, then examines four areas where obligations have intensified, and finally outlines five unresolved issues taxpayers should keep in mind as they complete their documentation.
Access the full article below to explore the details and understand how these changes might impact your TP strategy.