We have introduced transfer pricing in our previous post and now we will be walking through the documentation of transfer pricing.
According to Transfer Pricing Rules, taxpayers with inter company transactions are required to prepare transfer pricing documentation on a contemporaneous basis.
Section 139 of the ITA refers to 'control' as both direct or indirect control while controlled transaction is a transaction between two (or more) enterprises that are 'associated enterprises' with respect to each other.
Accordingly, to the widely used definition, enterprises are associated if:
a) An enterprise participates directly or indirectly in the management, control or capital of another enterprise or;
b) The same persons participate directly or indirectly in the management, control or capital of two enterprises.
Acceptability of Documentation
Submission of Transfer pricing documentation
The Transfer Pricing Documentation is not required to be submitted with the annual Return Forms. However, the documentation should be made available within 30 days upon request by the IRBM.
Taxpayers are permitted to file their transfer pricing documentation in Bahasa Malaysia or English. Where supporting documents are in a language other than Bahasa Malaysia or English, a translation should be provided upon submission of the transfer pricing documentation.
This material or communication has been prepared for the sole purpose of providing general information to our clients, and is not intended to be relied upon as accounting, tax or other professional advice. Consent has to be obtained from the firm prior to any act of republishing or circulating to the general public. While the information is considered correct at the date of publication, changes in circumstances or updates in tax ruling after the time of publication may impact its accuracy and reliability. We have not, by means of this material or communication, rendered any professional advice or services. Thus, we shall not be responsible for any losses sustained by any person who relies on this material or communication. Please refer to our tax advisors should you require our consultancy services.
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