Transfer Pricing
We anticipate and solve the transfer pricing challenges thatabound when transactions cross multiple tax jurisdictions.
Is transfer pricing a risk for your business?
Transfer pricing (TP) is the setting of transfer prices for transactions relating to sales and purchases of goods, services, intangibles and financing provided between associated persons within a Group.
All related party transactions are required to be conducted at arm’s length prices, i.e. the prices set for transactions between associated persons should approximate the prices set between independent parties undertaking transactions under similar or comparable terms and conditions. The key challenge is firstly to set up the arm’s length transfer prices and to defend them against any challenges by the tax authorities. Internally within a group, the other challenge is managing the transfer pricing risks associated with tax planning and tax compliance.
Transfer pricing is complex and getting it wrong can be costly. With constantly changing tax legislation, the need for specialist tax advice has never been greater. Given the current situation where the tax authorities have provided the basic framework to implement transfer pricing in the country, taxpayers have no valid grounds for ignoring their responsibilities to comply with the transfer pricing regime.
Our transfer pricing unit offers a full range of transfer pricing services. This team of experienced tax and transfer pricing specialists will ensure that you receive the highest level of support in managing your transfer pricing affairs. In addition, our network of member firms in 130 countries across the globe and strategic competencies place us in the position to provide an all-rounded approach for your organisation’s transfer pricing needs.
- Transfer Pricing Threshold in Malaysia
The Malaysian Transfer Pricing Guidelines 2012 prescribes the following financial thresholds for preparation of a comprehensive set of transfer pricing documentation, i.e. Full Transfer Pricing Documentation:
| - Non-financial transactions: | Annual gross income exceeding RM25 million, and total related party transactions exceeding RM15million per annum; or |
| - Financial transactions: | Provision of financial assistance exceeding RM50 million for non-financial institutions. |
Otherwise, taxpayers are allowed to prepare documentation that is less extensive, i.e. Limited TP Documentation.
- Local file
- Master file
- Country-by-Country report
- Regional transfer pricing documentation
- Intra-group financing comparability analysis
- Intangible property comparability analysis and DEMPE analysis
- High-level transfer pricing review
- Transfer pricing due diligence
- Transfer pricing planning
- Transfer pricing strategy setting
- Value chain alignment
- Advance Pricing Agreement
- Mutual Agreement Procedures
- Transfer pricing audit defense
- Litigation and appeal
Cases That We've Handled
Country-by-Country Report
We assisted a multinational corporation headquartered in Malaysia to prepare a three-tier documentation that complies with BEPs requirements, Country-by-Country Reporting Rules and Malaysian Transfer Pricing provisions.
The documentation comprises a Country-by-Country Report, Master File and Local File as stipulated under the guidelines of the Malaysian tax authorities.
Intra-group Financing
We assisted a company to successfully defend its Transfer Pricing dispute against the Malaysian tax authorities.
The company was alleged to have not complied with the Malaysian Transfer Pricing provisions with regard to interest-free intra-group balances. We defended the company and secured a very favorable outcome.
Transfer Pricing Documentation
We assisted a manufacturing company that was headquartered outside Malaysia to prepare Transfer Pricing documentation for their operations in Cambodia.
The documentation arose as a result of Transfer Pricing rules introduced recently by the Cambodian Government that required all companies to prepare relevant transfer pricing documentation to substantiate their controlled transactions. We worked with our Cambodia Office to successfully prepare the documentation that complied with the Cambodia Transfer Pricing Rules.
Your Smarter Choice in Managing Transfer Pricing
We are ranked a Top Tier firm in Malaysia for our Transfer Pricing services by the World TP Guide
