The 2024 guidelines integrate pivotal legal updates:

• Amendments to Section 140A and the introduction of Section 113B under the Income Tax Act 1967 (ITA).
• Inclusion of the Income Tax (Transfer Pricing) Rules 2023, refining definitions such as the "arm’s length range" and updating documentation thresholds.

The concept of "control" has been broadened under Section 140A(5A):

• It now includes scenarios where an individual or third party holds at least 20% shareholding and exerts influence over business decisions, operations, or management.
• Examples provided illustrate how control relationships impact transfer pricing, covering areas like proprietary rights, pricing policies, and board appointments.

To streamline compliance, the guidelines introduce a two-tiered framework for Controlled Transaction Pricing Documentation (CTPD):

• Full CTPD: For businesses with gross income exceeding RM30 million and cross-border controlled transactions above RM10 million.
• Minimum CTPD: For smaller entities falling below the thresholds.
• Exemptions are clarified for individuals and businesses engaged only in domestic transactions or minimal controlled transactions.

The arm’s length range has been redefined:

• The range now spans the 37.5th to 62.5th percentile of a dataset.
• The median is emphasized as the benchmark for adjustments when comparability or data reliability is in question.
• Calculation examples demonstrate these principles in action.

Profit allocation must now closely align with value creation:

• Expanded guidance for intra-group services, intangibles, and functions like marketing and research.
• Enhanced focus on functional analysis, including risks, assets, and transaction conduct.

A new framework clarifies risk in controlled transactions:

• Steps include identifying significant risks, analyzing contractual allocation and control, and determining pricing based on risk assumption.
• Detailed examples illustrate how multinational enterprises manage and mitigate risk effectively.

The guidelines delve into business restructuring scenarios:

• Guidance on applying the arm’s length principle to restructuring, particularly regarding compensation for terminated agreements or asset transfers.

A simplified methodology for low-value-adding intra-group services is introduced:

• Focus on cost allocation with a minimal markup to reduce compliance burdens.