Updated: Sep 8, 2022
The Malaysian Inland Revenue Board ("MIRB") published the following updated Tax Audit Frameworks on December 15, 2019:-
Tax Audit Framework 2019;
Petroleum Tax Audit Framework 2019; and
Transfer Pricing Audit Framework 2019.
The Transfer Pricing Audit Framework 2019 ("2019 TP Framework") is effective as of 15 December 2019 and replaces the Transfer Pricing Audit Framework 2013, issued on 1 April 2013.
As a result of the 2019 TP Framework (which is now only available in the Bahasa Malaysia version), several significant changes were incorporated, which are briefly outlined below:
Years of Assessment Covered
It is clarified in the 2019 TP Framework that transfer pricing audits may cover a period of up to seven years in accordance with Section 91(5) of the Income Tax Act 1967, which provides the Director-General with a seven-year time limit in which to issue an initial or supplemental assessment in respect of Transfer Pricing Adjustments.
Required Documents to Be Furnished Before the Start of a Field Audit
The taxpayer was formerly expected to submit PowerPoint slides with information about the business during the opening audit meeting. According to the 2019 TP Framework, the PowerPoint slides must now be delivered to the MIRB at least seven calendar days before the audit visit to be considered valid.
A more condensed timetable for the delivery of documents and information
An IRB request for documentation and information is typically followed up by a 21-day response period, which is standard practice in transfer pricing audits. There has been a reduction in the time frame to 14 days.
A taxpayer's failure to respond by the deadline may result in the MIRB proceeding with the audit in any manner it deems suitable.
Responses to MIRB's proposed transfer pricing adjustments must be submitted by a stricter deadline
In the past, taxpayers were granted a 21-day timeframe to file an objection to the MIRB's proposed transfer pricing adjustments. With the 2019 TP Framework, this period has been reduced to 18 days.
Disclosure of Information voluntarily
Taxpayers are given detailed instructions on how to make a voluntary disclosure of transfer pricing non-compliance to avoid penalties.
Offences and Penalties
The Concessionary Penalty Rates have been revised as well.
之前，纳税人应在审计会议前提交载有企业信息的 PowerPoint 幻灯片。根据2019年转让定价审计框架，PowerPoint 幻灯片现在必须在审计访问前至少7个日历日交付给马来西亚税务局，才能被视为有效。
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