SE Lai CK Alerts #06-2014 (YA2014 Form C – New Section to declare whether TP Documentation have been prepared)

Important Circular 

Dear Value Clients and Associates 

  1. We refer to our earlier Alerts #7-2012 and #6-2013 on developments on Transfer Pricing regulations in Malaysia.
  2. Further to the aforesaid Alerts, we wish to advise that
    • The IRB have recently uploaded the sample YA 2014 tax return form for companies (Form C).
    • A new Section R4 (Form C Page 14) have been inserted, requiring corporate taxpayers to indicate on the return form whether Transfer Pricing Documentation have been prepared.
    • This new requirement is a further development in the IRB’s monitoring of taxpayers’ compliance with Transfer Pricing regulations
  3. A self-explanatory extract of the YA2014 Guidebook pertinent to Section R4 is provided below for your kind and urgent attention. A copy of the sample YA 2014 Form C is also attached for your reference.

Item

Subject

Explanation

R4

Transfer pricing documentation prepared
  1. Referring to the Income Tax (Transfer Pricing) Rules 2012 and Transfer Pricing Guidelines 2012:
    • A person who enters into a controlled transaction shall prepare a contemporaneous transfer pricing documentation.
    • The transfer pricing documentation shall be prepared for the year in which a controlled transaction exists.
  2. Contemporaneous transfer pricing documentation means transfer pricing documentation which is brought into existence:
    • when a person is developing or implementing any controlled transaction; and
    • where in a basis period for a year of assessment, the controlled transaction is reviewed and there are material changes, the documentation shall be updated prior to the due date for furnishing a return for that basis period for that year of assessment.

If the current transfer pricing documentation is prepared, enter ‘X’ in the box for ‘Yes’.

Enter ‘X’ in the box for ‘No’ if the current transfer pricing documentation has not been prepared or is not relevant.

We strongly urge companies with controlled transactions (i.e. transactions with Related Parties) to ensure that Transfer Pricing documentation are prepared. 

Please do not hesitate to contact us should you require clarifications on the above. 

18 July 2014

YA2014-Sample-Form-C-Return-FormDownload