There has been an update to the TP Rules and APA Rules which was issued by the Malaysia Inland Revenue Board on 29th May 2023.
The local file now need to be time stamped by the due date
for filing of return of income and also needs to include details as generally
required in the Master File (supply chain, group overview, etc.). For a company
with financial year end of 31 March, the due date for return is 31 October 2023
(7 months after financial year end).
Please refer to the key changes/updates in the TP rules and
APA rules below:
TP Rules 2023
- The effective date of the attached TP rules is year of
assessment 2023;
- Arm’s length range is defined as 37.5 percentile to
62.5 percentile;
- Adjustment made to median if taxpayer’s result falls
outside the arm’s length range;
- Under certain specific circumstances, adjustment could
be made to median or a higher point, even if taxpayer’s result is within
the arm’s length range;
- TP report (local file) should be ready by return filing
date;
- TP report (local file) needs to be dated (date of
completion);
- Significant additional information expected in TP
report (local file) on group operations, similar to Master File that
otherwise applies only to entities that are subject to CbCR Rules; and
- Offsetting adjustment rule removed (potentially impacts
domestic controlled transactions)
APA Rules 2023
- APA continues to be available to only taxpayers assessable
and chargeable to tax, and for only cross-border transactions
- Only bilateral/multilateral APA allowed if the
counterparty jurisdiction is a treaty partner or the Malaysian taxpayer is
a permanent establishment
- Rollback allowed only for bilateral/multilateral APA
and subject to certain conditions, for up to 3 years immediately preceding
the covered period
- Non-refundable APA application fee of MYR 5,000 if
taxpayer submits application within 2 months after receipt of notification
from IRBM whether taxpayer can proceed to submit application
- Non-refundable APA application fee of MYR 10,000 if
taxpayer submits application after 2 months but within 6 months after
receipt of notification from IRBM whether taxpayer can proceed to submit
application
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