Transfer Pricing
Many businesses assume that transfer pricing rules only apply to large multinational corporations (MNCs) with cross-border transactions. However, in Malaysia, any business engaging in related-party transactions—including SMEs—must comply with strict transfer pricing regulations under the Income Tax Act 1967, the Income Tax (Transfer Pricing) Rules 2023 [P.U.(A) 165/2023], and the Malaysian Transfer Pricing Guidelines 2024 (TP Guidelines 2024). Introduced on December 30, 2024, and applicable from the year of assessment (YA) 2023 onwards, the TP Guidelines 2024 expand on the previous 2017 version by providing more detailed clarifications and new guidance on contemporaneous transfer pricing documentation requirements.
- Penalties ranging from RM20,000 to RM100,000 for failing to submit transfer pricing documentation (TPD).
- A 5% surcharge on transfer pricing adjustments, even if there is no additional tax payable.
- Shortened submission deadlines, requiring TPD to be provided within 14 days during an audit.
With the Malaysian Inland Revenue Board (IRB) tightening enforcement, businesses must ensure that their transfer pricing practices meet arm’s length standards to avoid financial and legal consequences.
How HTL Can Help
At HTL, we provide expert transfer pricing advisory services to ensure businesses stay compliant while minimizing tax risks.
Transfer Pricing Planning
Structuring related-party transactions to align with arm’s length pricing and optimize tax efficiency.
Transfer Pricing Documentation (TPD) Preparation
Ensuring businesses meet compliance requirements by preparing comprehensive reports.
Audit Support & Risk Management
Assisting businesses during IRB audits, addressing queries, and mitigating potential adjustments or penalties.
Benchmarking Analysis
Conducting independent benchmarking studies using reliable databases to justify pricing and support documentation.
Group-Wide Transfer Pricing Policy Development
Helping groups standardize and document their transfer pricing approach across entities to ensure consistency and defendability.
Why Work with HTL?
Comprehensive Compliance Support
We help you prepare contemporaneous transfer pricing documentation that meets the latest Malaysian regulatory requirements, ensuring your business remains compliant.
Avoid Costly Penalties
Comprehensive and timely documentation reduces the risk of adjustments and penalties during tax audits.
Maximize Tax Efficiency
We structure related-party transactions to achieve optimal tax outcomes without compromising compliance.
Trusted Expertise
Our team brings years of experience in tax advisory and transfer pricing audits, delivering practical and strategic solutions.
Tailored Solutions for Your Business
We understand that every business is unique and provide personalized advice suited to your group’s structure and industry.
Common Transfer Pricing Issues
We Help Businesses Avoid
- Setting related-party transaction prices below market value
- Providing free or undercharged services to related parties
- Allocating costs without proper basis or documentation
- Applying inconsistent or non-standard pricing policies
- Granting interest-free loans or advances without support
These practices can trigger audit risks and non-compliance penalties. At HTL, we help ensure your transactions are properly structured, documented, and defendable.
Get Transfer Pricing solutions tailored to your business
At HTL, we simplify complex transfer pricing requirements and help you stay compliant while optimizing tax outcomes. Whether you’re a growing SME or part of a larger group, our team is here to guide you every step of the way.
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