What is Malaysia approach for Transfer Pricing Surcharges?

KnowledgeWhat is Malaysia approach for Transfer Pricing Surcharges?

What is Malaysia approach for Transfer Pricing Surcharges?


The Inland Revenue Board of Malaysia (“IRBM”) has recently issued a Frequently Asked Questions (“FAQ”) to address the questions taxpayers and tax professionals have regarding the Transfer Pricing (“TP”) Surcharge under Subsection 140A (3C) of the Income Tax Act (“ITA”).


The key issues clarified by the IRBM in the FAQ are:

  1. Transfer pricing surcharge on loss-making and tax-exempt companies
  2. Implementation of surcharge
  3. Mutual exclusivity of surcharge and tax penalty
  4. Surcharge on tax-incentivized companies
  5. Rights of appeals
  6. Factors in determining surcharge rate
  7. Adjustments of surcharge under MAP

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Taxpayers should continuously monitor their transfer prices and review them regularly to mitigate the risk of a TP audit. Transfer Pricing Solutions Malaysia can assist with practical and cost-effective solutions for Entrepreneurs, Start-Ups or SMEs. 


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