Scope of guideline applied [in (Malaysian) IRBM Transfer Pricing Guideline 2012]

The IRBM Transfer Pricing Guideline 2012 are applicable on controlled transactions for the acquisition or supply of property or services between associated persons, where at least one person is assessable or chargeable to tax in Malaysia. To ease reader expect, contain been summarized as follow:-

Para 3.1

-       controlled transactions for the acquisition or supply of property or services between associated persons,

-       do not include individuals not carrying on a business

Para 3.1(a)

-       Guidelines apply wholly to a business with gross income exceeding RM25 million , and the total amount of related party transactions exceeding RM15 million

Para 3.1(b)

-       the guidelines on financial assistance are only applicable if that financial assistance exceeds RM50 million.

-       The Guidelines do not apply to transactions involving financial institutions.

Para 3.2

-       Any person which falls outside the scope of 3.1 may opt to fully apply all relevant guidance as well as fulfil all Transfer Pricing Documentation requirements in the Guidelines

Para 3.3

-       Guidelines need not apply to transactions between persons who are both assessable and chargeable to tax in Malaysia and

-       where it can be proven that any adjustments made under the Guidelines will not alter the total tax payable or suffered by both persons

Para 3.4

-       Para 3.1 does not apply to transactions between a permanent establishment ((PE) – in Malaysia) and its head office or other related branches (entity outside Malaysia)

-       the PE will be treated as a (hypothetically) distinct and separate enterprise from its head office or other related branches