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Concept of Contemporaneous Documentation in Transfer Pricing

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Many countries' legislation regarding transfer pricing uses the concept of contemporaneous documentation as a critical component.


Rule 4(1) of the Income Tax (Transfer Pricing) Rules 2012 stipulates that a person who enters into a controlled transaction shall prepare a contemporaneous transfer pricing documentation. 


The expression "Contemporaneous Transfer Pricing Documentation" refers to transfer price documentation that is established—


  1. when a person plans or executes a controlled transaction; and

  2. where a controlled transaction is examined during a basis period for a year of assessment, and there are material changes, the documentation must be updated prior to the due date for filing a return for that basis period for that year of assessment [1].

许多国家关于转让定价的立法将同期文件的概念作为一个重要的组成部分。


《2012年所得税(转让定价)细则》第4(1)条规定,进行受控交易的人应准备一份同期转让定价文件。 


所谓 "同期转让定价文件 "是指在以下情况下建立的转让定价文件:


  1. 当一个人计划或执行一项受控交易时;以及

  2. 如果在某一评估年度的基础期间对受控交易进行审查时发现有重大变化,那么就必须在该评估年度的基础期间的申报截止日期之前作出更新(1)



When there is a related party transaction in Malaysia, the regulations state that even though contemporaneous transfer pricing documents are not required to be filed, the taxpayer must declare, when filing their income tax return, whether or not contemporaneous transfer pricing documents have been prepared.


在马来西亚,如果存在关联方交易,法规规定同期转让定价文件虽然不需要提交,但纳税人在提交所得税申报表时,需要申报是否准备了同期转让定价文件。 



The term "contemporaneous documentation" refers to any information, records, or other documents that already exist or are made when the Taxpayer is establishing or implementing any arrangement that has the potential to bring up transfer pricing concerns. 


It is crucial that the documentation on which the taxpayer relies to determine the arm's length price should be available when the transaction is entered into between the parties or at the latest when the analysis is carried out and not produced after establishing the price. 


术语 "同期文件"是指纳税人在建立或实施任何有可能带来转让定价问题的安排时,已经存在或制作的任何信息、记录或其他文件。 


很重要的一点是,纳税人赖以确定正常价格的文件应该是在各方之间达成交易时或最晚在进行分析时就有的文件,而不是事后定价后才制作的。


[1] - Illustration:


In the financial year 2021, Super VIP Holdings will lend RM5 million to its subsidiary, VIP Enterprises.


Both companies are considered to have their tax residency in Malaysia.


Benchmarking Analysis and transfer pricing documentation are prepared to determine the terms and conditions of the loan transaction, including the determination of interest rates independently of each other, i.e. based on the principle of arm’s length.


The loan transaction is concluded in accordance with the transfer pricing documentation, and its execution will be included in the financial statements of both companies for the financial year 2021.


The entities are expected to file their corporation tax returns for the Year of Assessment 2021 in 2022.


In preparing their tax returns, the entities mentioned above need to go through the terms and conditions of the loans to see if they still meet the requirements of the arm's length principle.


(1) - 说明


在2021财年,超级 VIP 控股公司将借贷500万马币给其子公司 VIP 企业。


两家公司都被认为是在马来西亚有税务居留权。


基准定位分析 (Benchmarking Analysis) 和转让定价文件的准备是为了确定这项贷款交易的条款和条件,这也包括利率的确定彼此独立,也就是说建立在独立交易原则上。


该贷款交易是根据转让定价文件达成的,其执行情况将在两家公司2021年财政年度的财务报表中体现出来。


上述实体将在2022年提交2021年评估年的公司所得税申报。


在准备这些报税表时,上述实体需要去检查贷款的条款和条件,看它们是否依然满足公平交易原则的要求


In practice, preparing and updating Contemporaneous Transfer Pricing Documentation is not an easy task, and issues beyond the taxpayer's control often arise.


There is a possibility that the relevant information and data about comparable uncontrolled transactions will not be available in the public domain until the particular date that has been established by law.


However, such information would be accessible to the tax authorities when transfer pricing assessment or audit procedures are carried out a few years later.


When the taxpayers are faced with circumstances such as these, it may be difficult for them to meet the statutory obligation of preparing contemporaneous documentation by the indicated date.


Consequently, the Inland Revenue Board of Malaysia ought to provide guideline on the circumstances under which the criteria for preparing and maintaining contemporaneous transfer pricing documentation can be relieved a little bit. 


在实践中,准备和更新同期转让定价文件并不是一件容易的事,纳税人无法掌控的问题经常都会出现。


有可能在法律规定的特定日期之前,可比性的非控制交易的相关信息和数据不会出现在公共领域。


然而,在几年后,当税收局进行转让定价评估或审计程序时,他们却可以轻而易举地获得这些信息。


当纳税人面临这种情况时,他们可能很难履行在指定日期前准备同期转让定价文件的法定义务。


因此,马来西亚税收局应该提供指南,说明在什么情况下可以稍微减轻准备和保存同期转让定价文件的标准。 



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