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IRBM’s Response to CTIM on the Tax Corporate Governance Framework (TCGF) & TCGF Guidelines

Updated: Nov 5, 2022

The new Tax Corporate Governance Framework ("TCGF"), dated April 11, 2022, as well as the Guidelines for the TCG Framework (Guidelines), has been published on the website of the Inland Revenue Board of Malaysia ("IRBM"). The TCG Framework and these Guidelines are intended to be read in conjunction with one another.

For further information, see the article titled "Tax Corporate Governance Framework Introduced."

The Chartered Tax Institute of Malaysia (CTIM) has received responses from the IRBM dated 20 September 2022 to members' comments and requests for clarification on the Tax Corporate Governance Framework and TCGF Guidelines regard to specific issues.

Issue No 1 - The Criteria

Refer to paragraph 4.1 of the TCG Framework Guidelines:-

IRBM has confirmed that other companies, in addition to those mentioned above, are free to come forward voluntarily to apply for and participate in the Tax Corporate Governance Framework (TCGF) Programme.

Other interested organisations may contact IRBM via to communicate their interest or to obtain further information on the Programme.

Issue No 2 - Application of Tax Corporate Governance

Refer to paragraph 4.2 of the TCG Framework Guidelines:-

CTIM members' comments and requests for clarification:-

Will the application form to participate in the TCGF Programme be available on the IRBM’s website?

It is suggested that the IRBM issues a prescribed form for submission by taxpayers to maintain consistency in the applications submitted.

Please advise the earliest date a taxpayer can apply to participate in the TCGF Programme.

Is there any deadline to apply?

It is stated that an authentication letter is given to taxpayers once the IRBM is satisfied with the internal control after performing the preliminary review and assessment process. What is the timeline for the IRBM to issue this letter, and who will conduct the preliminary review and assessment?

IRBM's Response:

A test run of the TCG is being carried out as a pilot project in Malaysia at the moment.

As a result, an invitation to participate in the programme will be sent from Inland Revenue to the chosen company, and the application form will be made available to them.

Other interested companies can get in touch with IRBM via to express their interest or to gain further information, and notification will only be given to the qualified organisation.

The framework says that the proposed time frame, which starts when the IRBM accepts the participant as a participant and ends when the participant status is granted, is eight to twelve months.

A TCG committee will examine this with TCG officers from the branch office.

Issue No 3 - TCG Review

Refer to paragraph 9 of the TCG Framework Guidelines:-

CTIM members' comments and requests for clarification:-

  • Please elaborate on the procedures in place to review the TCG. Please also clarify if the TCG will be reviewed by the same IRBM branch which handles the taxpayer’s income tax files.

  • Is there any separate team in the IRBM in charge of the framework? If so, any contact details?

  • Will the review process result in an audit on the taxpayer?

  • Understand that taxpayers who fulfil the requirement and criteria listed by the IRBM will be deemed qualified for the program's benefits and shall not be subjected to audit and investigation, but for how long (e.g. 3 years, 5 years, etc.) will not be subjected to audit and investigation after the Authentication Letter is issued?

  • Also, please confirm if exclusion from audit and investigation will cover all tax aspects, so long as the framework covers the same taxes, transfer pricing etc.

  • Please confirm that information provided to the IRBM for the purpose of the Programme are strictly confidential and will not be shared with other Government agencies or used against taxpayers to conduct tax audits and investigations.

IRBM's Response:

The TCG review will be conducted by the TCG committee and TCG officers from the branch office, which handles the organisation’s income tax files.

The IRBM will perform an adequacy review of the organisation’s TCGF and an effectiveness review of the organisation’s tax control framework (TCF).

Organisations may contact IRBM via for any questions regarding TCG Framework and Guidelines.

The review procedure is primarily for the IRBM to accept the organisation into the programme.

IRBM will discuss the issues upfront with the organisation if any key tax risk areas are identified during the review.

Taxpayers that fulfil the requirement will not be subjected to audit and investigation for three (3) assessment years from the date of the award letter. TCGF should be applied comprehensively to collectively enjoy the programme benefit (terms applied).

The information provided to the IRBM for the purpose of the programme is treated as confidential.

Issue No 4 - TCG Process

Refer to paragraph 12 of the TCG Framework Guidelines:-

An approach to implementing tax governance procedures is described in the following process.

CTIM members' comments and requests for clarification:-

Will thresholds be implemented to determine what constitutes key/material transactions undertaken by the taxpayer (including related party transactions) and thus needs to be specifically addressed in the TCGF in terms of tax risks involved?

If so, will the threshold be based on absolute value alone as per Paragraph 13.1 of the TCGF Guidelines (or proportion of a certain denominator, e.g. revenue)?

IRBM's Response:

IRBM will not set the thresholds since the organisation may have different needs, sizes and backgrounds. The organisation's tax control framework shall be able to identify, overcome, control and report tax risks suitable to the organisation’s tax policy/tax strategy and the organisation’s risk appetite.

CTIM members' comments and requests for clarification:-

Can an approved tax agent under S.153 of the ITA 1967 undertake this review assessment?

If the preparat