Worldwide transfer pricing reference guide 2014

Malaysia (continued)
Documentation requirements
Contemporaneous documentation pertaining to transfer pricing need not be submitted with the tax return, but it should be made
available to the IRB upon request. All relevant documentation must be in, or translated into, Bahasa Malaysia (the national language)
or English.
There is no disclosure required on a tax return to indicate that transfer pricing documentation has been prepared.
Contemporaneous transfer pricing documentation should include records and documents providing a description of the following:
• Organizational structure including an organization chart covering persons involved in a controlled transaction
• Nature of the business or industry and market conditions
• The controlled transaction
• Strategies, assumptions and information regarding factors that influenced the setting of any pricing policies
• Comparability, functional and risk analysis
• Selection of the transfer pricing method
• Application of the transfer pricing method
• Documents that provide the foundation for or otherwise support or were referred to in developing the transfer pricing analysis
• Index to documents
• Any other information, data or document considered relevant by the person to determine an arm’s length price
Documentation deadlines
Contemporaneous transfer pricing documentation is defined as transfer pricing documentation brought into existence:
• When a person is developing or implementing any controlled transaction
• Where in a basis period for a year of assessment the controlled transaction is reviewed and there are material changes, the
documentation shall be updated prior to the due date for furnishing a return for that basis period for that year of assessment
Statute of limitations on transfer pricing assessments
There is a five year statute of limitations for tax adjustments (reduced from six years, effective 1 Jan 2013), and documentation must be
kept for seven years. There is no statute of limitations in instances of fraud, willful default or negligence.
Return disclosures/related party disclosures
Disclosure of arm’s length values is required in the tax return for the following transactions:
• Sales to related companies
• Purchases from related companies
• Other payments to related companies, lending to and borrowing from related companies
• Receipts from related companies
Transfer pricing-specific returns
The IRB started, in July 2011, to require a form related to information on cross-border transactions, from selected corporate taxpayers,
to request for the following information for a given year:
• Name(s) of ultimate, holding companies, subsidiaries, both local and foreign, and affiliates in Malaysia
A chart of the global corporate structure to which the taxpayer belongs, including ultimate holding companies, direct and
indirect subsidiaries, associated companies and other related parties, indicating the companies with whom the taxpayer conducts
related party transactions
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