Updated: Sep 14
For the Inland Revenue | 对内陆税收局而言
To obtain information on related party transactions and comparability information through Contemporaneous TP Documentation provided by the company:-
To serve as a reference for the selection of investigation subjects
To assess and check the possibility of tax irregularities in transfer pricing, to test whether the taxpayer has engaged in transfer pricing practices and as a preliminary basis for tax adjustments.
通过企业提供的转让定价同期资料，获取关联交易 [Related Party Transactions] 的信息及可比 [Comparability] 信息
For The Taxpayers | 对纳税人而言
Meeting compliance requirements (for those businesses that meet the threshold for the preparation of Contemporaneous Transfer Pricing Documentation)
Avoid penalties for failure to prepare Contemporaneous Transfer Pricing Documentation under section 113B of the Income Tax Act 1967
[Penalty: from a minimum of not less than RM20,000 to a maximum of RM100,000]
This will demonstrate a willingness to develop and implement transfer pricing that is consistent with the principle of independent trading and ensure that its transfer pricing is tested, particularly those taxpayers that have been making marginal profits and losses [even though without a profit, but continue to operate anyway] or are suspected of transfer pricing avoidance.
Internal business management needs, including group restructuring, assessment of the performance of entities within the group 】
Best Practices For Contemporaneous Documentation | 同期文档的最佳实践
1. Get familiar with the Transfer Pricing Regulations
Tax law can be difficult to understand, particularly when comparing the laws of different jurisdictions.
The rules that govern transfer pricing are known to undergo periodic revisions in the modern era.
For instance, new rules were implemented not too long ago in Malaysia, and they came into operation effectively from January 1, 2021.
It is essential to maintain a current knowledge base on the timing of the submission of documentation (Currently, in Malaysia, all documentation should be made available within 14 days upon request by IRB) and the question of whether or not countries have made particular changes to their policy.
2. Review your Documentation each year
It is a smart practice to examine and update all relevant documents annually. This will help to guarantee that your business does not incur any fines as a result of inaccurate documentation.
These mistakes arise when businesses prepare their documentation for the year but then neglect to keep it updated as the year progresses.
3. Keep up with the legal contracts between Companies
Making sure that your Intra-Group Legal Agreements are up to date will guarantee that the audit goes as smoothly as possible.
4. Be consistent with your Customs and Duty Declarations
It is of the utmost importance to guarantee that your in-house customs department operates effectively to guarantee that all international transactions are free of errors and contain information that is consistent throughout.
5. Maintain a dependable Point of Contact at all times
The point of Contact is the person who represents an organisation for a specific task.
It's possible for there to be inconsistencies in your documentation if you prepare it utilising numerous tax or legal consultants located in different countries.
To ensure that your documentation is correct everywhere it is used, you should make every effort to keep a single point of contact centralised inside your firm and with the service provider you use.
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