Minimum Transfer Pricing Documentation LHDN

View Full Size

Minimum Transfer Pricing Documentation LHDN

On 11.11.2022 LHDN has published a new document for transfer pricing which is Minimum Transfer Pricing Documentation.

The Minimum Transfer Pricing Documentation is to replace the Limited Transfer Pricing Documentation.

Key takeaways:

You will understand the:

1. Requirement to use this documentation.

2. Differences between Minimum Transfer Pricing Documentation and Limited Transfer Pricing Documentation.

Requirement to use the documentation

According to Section 3.1 of Transfer Pricing Guidelines 2012, there are two criteria to be determined:

i. gross income and total related party transactions must be greater than RM25 million and RM15 million respectively; or

ii. financial assistance must be greater than RM50 million.

If tax payer fulfils one of the criteria as above, Full Transfer Pricing Documentation should require to be prepared.

On the other hand, Minimum Transfer Pricing Documentation is required for those falls outside the transfer pricing guidelines 2012 section 3.1.

Differences between Minimum Transfer Pricing Documentation and Limited Transfer Pricing Documentation.

The major difference between these two documentations is comparability study. In previous Limited Transfer Pricing Documentation, we do not perform any comparable working and causing there is a limitation to justify the reasonableness of pricing policy.

Minimum Transfer Pricing Documentation has implemented a new section to resolve this limitation.

New Requirements

Under section D of Minimum Transfer Pricing Documentation, there are 6 columns need to fill in to justify the transfer price is reasonable, which are:

• What is the element of costs

• What is the anticipated profit mark-up

• Who determine the pricing policy

• How often is the policy being revised

• Sample of documents to support the pricing policy

• Comparability study Source Minimum Transfer Pricing Documentation

Source:

https://www.hasil.gov.my/media/gesbb4yx/template-minimum-tp-doc-1_2022.pdf

Visit Us

Wisma KTP, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
Wisma THK, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

KTP (Audit, Tax, Advisory)

An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients

THK (Secretarial, Bookkeeping, Payroll, Advisory)

A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsourcing bookkeeping, and payroll services to clients

Website www.thks.com.my
Facebook https://bit.ly/3nQ98rs

KTP Lifestyle

An internal community for our colleagues on work and leisure.

KTP Career

An external job community on vacancies in Johor Bahru for interns, graduates & experienced candidates.

Instagram https://bit.ly/3u2PxHg
Facebook http://bit.ly/3rPxz9o

#Thk

#KTP