Transfer Pricing
- 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 managing tax risk. Whether you’re a growing SME or part of a larger group, our team can scope the documentation, prepare defensible support and assist with LHDN queries.
Need to confirm your documentation scope? HTL can assess whether your business requires full CTPD, minimum CTPD or a targeted review based on your group structure and controlled transactions. Use our Transfer Pricing Documentation Scope Checker or request a tailored quotation.
Transfer Pricing FAQs
Quick answer: Malaysian transfer pricing rules can apply to both domestic and cross-border related-party transactions. Documentation scope depends on the transaction type, annual values and the exemptions and thresholds in the Malaysian Transfer Pricing Guidelines 2024.
Does my Malaysian company need transfer pricing documentation?
A Malaysian taxpayer with related-party transactions must apply the arm’s-length principle. Whether it must prepare full CTPD, minimum CTPD or is exempt from CTPD depends on the transaction type, value and the specific exemptions in the Malaysian Transfer Pricing Guidelines 2024.
Do transfer pricing rules apply to transactions between Malaysian related companies?
Yes. Domestic related-party transactions can fall within Malaysia’s transfer pricing rules. Certain domestic transactions may qualify for a CTPD exemption, but the conditions must be checked carefully and supporting records should still explain the transaction and pricing.
What transactions count as controlled transactions?
Common controlled transactions include sales or purchases of goods, management and shared services, royalties and other intangibles, rentals, cost allocations, guarantees, loans, advances and other financial assistance between related parties.
Does my company need full or minimum CTPD?
Full CTPD generally applies where gross business income exceeds RM30 million and annual cross-border controlled transactions are at least RM10 million, or controlled financial assistance exceeds RM50 million. Taxpayers outside the full-scope thresholds may prepare minimum CTPD unless an exemption applies; permanent establishments prepare full CTPD.
What information does HTL need to quote for transfer pricing documentation?
Provide the financial year, group and ownership structure, audited accounts, related parties, transaction types and annual values, whether transactions are domestic or cross-border, intercompany agreements, prior documentation and any LHDN correspondence.
Can transfer pricing documentation be prepared only after LHDN requests it?
CTPD should be prepared contemporaneously rather than started only after a request. If documentation is incomplete, urgent remediation may still help, but the business must not backdate records and meeting the statutory response deadline can be difficult.
How long do I have to submit CTPD after an LHDN request?
The Malaysian Transfer Pricing Guidelines 2024 require CTPD to be submitted within 14 days after a written request from LHDN. Businesses should therefore keep agreements, invoices, calculations, benefit evidence and benchmarking support ready before an audit begins.
What penalties or surcharge can apply in a Malaysian transfer pricing audit?
From YA 2023, failure to furnish CTPD within 14 days of a written notice is an offence. If convicted, the fine is RM20,000 to RM100,000, or imprisonment for up to six months, or both. If no prosecution is instituted, LHDN may impose a RM20,000 to RM100,000 penalty for each YA. A surcharge of up to 5% may also apply to a transfer pricing adjustment.
Official references: LHDN — Transfer Pricing · Malaysian Transfer Pricing Guidelines 2024 · Transfer Pricing Tax Audit Framework 2025
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