{"id":21158,"date":"2021-06-16T16:00:09","date_gmt":"2021-06-16T08:00:09","guid":{"rendered":"https:\/\/chengco.com.my\/wp\/?p=21158"},"modified":"2026-09-17T17:54:45","modified_gmt":"2026-09-17T09:54:45","slug":"sme-need-to-prepare-malaysia-transfer-pricing-documentation","status":"publish","type":"post","link":"https:\/\/chengco.com.my\/wp\/2021\/06\/16\/sme-need-to-prepare-malaysia-transfer-pricing-documentation\/","title":{"rendered":"Transfer Pricing for SMEs in Malaysia: Frequently Asked Quesion (FAQ)"},"content":{"rendered":"\n<div class=\"wp-block-stackable-columns stk-block-columns stk-block stk-0c6b51f\" data-block-id=\"0c6b51f\"><div class=\"stk-row stk-inner-blocks stk-block-content stk-content-align stk-0c6b51f-column\">\n<div class=\"wp-block-stackable-column stk-block-column stk-column stk-block stk-66203f7\" data-v=\"4\" data-block-id=\"66203f7\"><div class=\"stk-column-wrapper stk-block-column__content stk-container stk-66203f7-container stk--no-background stk--no-padding\"><div class=\"stk-block-content stk-inner-blocks stk-66203f7-inner-blocks\">\n<div class=\"wp-block-stackable-heading stk-block-heading stk-block-heading--v2 stk-block stk-59082a8\" id=\"transfer-pricing-for-sm-es-in-malaysia-frequently-asked-quesion-faq\" data-block-id=\"59082a8\"><style>.stk-59082a8 .stk-block-heading__text{font-size:36px !important;font-weight:bold !important;font-family:\"Roboto\", Sans-serif !important;}@media screen and (max-width:999px){.stk-59082a8 .stk-block-heading__text{font-size:36px !important;}}<\/style><h1 class=\"stk-block-heading__text\">Transfer Pricing for SMEs in Malaysia: Frequently Asked Quesion (FAQ)<\/h1><\/div>\n\n\n\n<div class=\"wp-block-stackable-divider stk-block-divider has-text-align-left stk-block stk-8d1db70\" data-block-id=\"8d1db70\"><style>.stk-8d1db70 hr.stk-block-divider__hr{background:#0693e3 !important;height:10px !important;width:10% !important;}<\/style><hr class=\"stk-block-divider__hr\"\/><\/div>\n<\/div><\/div><\/div>\n<\/div><\/div>\n\n\n\n<div class=\"wp-block-stackable-columns stk-block-columns stk-block stk-5a78f34\" data-block-id=\"5a78f34\"><div class=\"stk-row stk-inner-blocks stk-block-content stk-content-align stk-5a78f34-column\">\n<div class=\"wp-block-stackable-column stk-block-column stk-column stk-block stk-1d8da1b\" data-v=\"4\" data-block-id=\"1d8da1b\"><div class=\"stk-column-wrapper stk-block-column__content stk-container stk-1d8da1b-container stk--no-background stk--no-padding\"><div class=\"stk-block-content stk-inner-blocks stk-1d8da1b-inner-blocks\">\n<div class=\"wp-block-stackable-text stk-block-text stk-block stk-42c375e\" data-block-id=\"42c375e\"><p class=\"stk-block-text__text\">We understand the pressures faced by SMEs when it comes to compliance with the Transfer Pricing Documentation. Common questions or beliefs floating around their mind would be:<\/p><\/div>\n\n\n\n<div class=\"wp-block-stackable-heading stk-block-heading stk-block-heading--v2 stk-block stk-86c31f1\" id=\"strong-my-companies-do-not-have-holding-companies-strong\" data-block-id=\"86c31f1\"><h3 class=\"stk-block-heading__text stk-block-heading--use-theme-margins\"><strong>My companies do not have holding companies<\/strong><\/h3><\/div>\n\n\n\n<div class=\"wp-block-stackable-text stk-block-text stk-block stk-835d472\" data-block-id=\"835d472\"><p class=\"stk-block-text__text\">The scope and definition of the related party in the Transfer Pricing context are broad. Companies with common major individual shareholders are also considered as related parties. If they have RPT between the companies, they must comply with the Transfer Pricing Rules and Guidelines 2012. It also applies to those families that own a few companies and there are RPT between the companies regarded as related parties.<\/p><\/div>\n\n\n\n<div class=\"wp-block-stackable-text stk-block-text stk-block stk-f28fc5f\" data-block-id=\"f28fc5f\"><p class=\"stk-block-text__text\"><\/p><\/div>\n\n\n\n<div class=\"wp-block-stackable-heading stk-block-heading stk-block-heading--v2 stk-block stk-ab27312\" id=\"strong-all-my-companies-are-sm-es-and-transfer-pricing-rules-and-guidelines-2012-only-apply-to-multinational-companies-and-large-corporates-strong\" data-block-id=\"ab27312\"><h3 class=\"stk-block-heading__text stk-block-heading--use-theme-margins\"><strong>All my companies are SMEs, and Transfer Pricing Rules and Guidelines 2012 only apply to multinational companies and large corporates.<\/strong><\/h3><\/div>\n\n\n\n<div class=\"wp-block-stackable-text stk-block-text stk-block stk-955c6bc\" data-block-id=\"955c6bc\"><p class=\"stk-block-text__text\">This view is entirely incorrect. In the relevant legislation such as Section 140A Income Tax Act 1967, Income Tax (Transfer Pricing) Rules 2012, and Transfer Pricing Guideline 2012, Transfer Pricing rules are never specified as only applicable to large corporates or multinational companies. If the companies are involved in RPT, they must comply with the Transfer Pricing rules.<\/p><\/div>\n\n\n\n<div class=\"wp-block-stackable-heading stk-block-heading stk-block-heading--v2 stk-block stk-7641163\" id=\"strong-my-group-of-companies-does-not-have-any-transactions-with-a-related-company-in-a-foreign-country-where-the-tax-rate-is-lower-than-the-malaysian-tax-rate-strong\" data-block-id=\"7641163\"><h3 class=\"stk-block-heading__text stk-block-heading--use-theme-margins\"><strong>My group of companies does not have any transactions with a related company in a foreign country where the tax rate is lower than the Malaysian tax rate.<\/strong><\/h3><\/div>\n\n\n\n<div class=\"wp-block-stackable-text stk-block-text stk-block stk-5c7fe59\" data-block-id=\"5c7fe59\"><p class=\"stk-block-text__text\">This kind of justification does not have the legal basis to save those companies from complying with Transfer Pricing rules. There is no exemption for any company from complying and preparing the transfer pricing documentation in the relevant legislation. The Transfer Pricing Guideline 2012 provides that if those people, including companies whose gross revenue exceeds RM25 million and the total amount of related party transactions exceeding RM15 million, or a person including a company providing financial assistance exceeds RM50 million, the Guideline applies to them. They are required to prepare the Transfer Pricing Documentation. For those companies outside that scope, they have an option to prepare the full transfer pricing documentation or a minimal transfer pricing documentation according to the Guideline. There is no any specific provisions or paragraph has exempt or exclude any person from preparing the documentation. Strictly speaking, if the companies have RPT, they must prepare the transfer pricing documentation.<\/p><\/div>\n\n\n\n<div class=\"wp-block-stackable-text stk-block-text stk-block stk-4167331\" data-block-id=\"4167331\"><p class=\"stk-block-text__text\"><\/p><\/div>\n\n\n\n<div class=\"wp-block-stackable-heading stk-block-heading stk-block-heading--v2 stk-block stk-8abc9f7\" id=\"strong-what-is-the-consequence-if-i-fail-to-prepare-the-transfer-pricing-documentation-and-my-related-parties-pricing-has-no-issue-of-tax-avoidance-strong\" data-block-id=\"8abc9f7\"><h3 class=\"stk-block-heading__text stk-block-heading--use-theme-margins\"><strong>What is the consequence if I fail to prepare the transfer pricing documentation and my related parties\u2019 pricing has no issue of tax avoidance?<\/strong><\/h3><\/div>\n\n\n\n<div class=\"wp-block-stackable-text stk-block-text stk-block stk-34c5159\" data-block-id=\"34c5159\"><p class=\"stk-block-text__text\">The new Section 113B Income Tax Act 1967 provides that if a person fails to provide the transfer pricing documentation as required, if, without conviction, that person can be imposed special penalty by Director General of Inland Revenue a minimum RM20,000 and maximum RM100,000.<\/p><\/div>\n\n\n\n<div class=\"wp-block-stackable-text stk-block-text stk-block stk-9c34efb\" data-block-id=\"9c34efb\"><p class=\"stk-block-text__text\">Suppose a company do not prepare themselves ready for transfer pricing documentation. In that case, they may risk that when the Inland Revenue Board of Malaysia (IRBM) requests the transfer pricing documentation and that person fails to do so, IRBM may impose that special penalty. However, that person can appeal because their company has no issue of tax avoidance as all the RPT and in Malaysia and all companies are taxed at the same tax rate. The discretion of remit the penalty lies with IRBM, and the stand of IRBM is unknown.<\/p><\/div>\n\n\n\n<div class=\"wp-block-stackable-text stk-block-text stk-block stk-8df37c0\" data-block-id=\"8df37c0\"><p class=\"stk-block-text__text\"><\/p><\/div>\n\n\n\n<div class=\"wp-block-stackable-heading stk-block-heading stk-block-heading--v2 stk-block stk-45a1f1f\" id=\"strong-my-companies-do-not-have-any-related-parties-transactions-and-only-have-intercompany-loans-and-advances-so-transfer-pricing-documentation-is-not-applicable-strong\" data-block-id=\"45a1f1f\"><h3 class=\"stk-block-heading__text stk-block-heading--use-theme-margins\"><strong>My companies do not have any related parties\u2019 transactions and only have intercompany loans and advances, so Transfer Pricing documentation is not applicable.<\/strong><\/h3><\/div>\n\n\n\n<div class=\"wp-block-stackable-text stk-block-text stk-block stk-51faf51\" data-block-id=\"51faf51\"><p class=\"stk-block-text__text\">The scope of RPT has covered intercompany loans and advances. As far as the Transfer Pricing Guideline 2012 is concerned, the intercompany loans or advances shall be charged interest on an arm\u2019s length basis.<\/p><\/div>\n\n\n\n<div class=\"wp-block-stackable-text stk-block-text stk-block stk-5e3680d\" data-block-id=\"5e3680d\"><p class=\"stk-block-text__text\">If you are concerned with the above issues and uncertain about what you shall do next, worry not. Click the button below to get initial complimentary consultation from us, and we will guide you with a simple plan and proposal that fits your budget. Follow the steps below: \u2013<\/p><\/div>\n\n\n\n<div class=\"wp-block-stackable-icon-list stk-block-icon-list stk-block stk-f2f4755\" data-block-id=\"f2f4755\"><style>.stk-f2f4755 .stk-block-icon-list-item__content{gap:4px !important;align-items:baseline !important;}.stk-f2f4755 {--stk-icon-list-icon-size:7.75px !important;}<\/style><svg style=\"display:none\"><defs><g id=\"stk-icon-list__icon-svg-def-f2f4755\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 190 190\"><polygon points=\"173.8,28.4 60.4,141.8 15.7,97.2 5.1,107.8 60.4,163 184.4,39 173.8,28.4\"\/><\/svg><\/g><\/defs><\/svg><div class=\"stk-block-icon-list__ul stk-block-icon-list--column\"><ul class=\"stk-block-icon-list__group\">\n<li class=\"wp-block-stackable-icon-list-item stk-block-icon-list-item stk-block stk-b4a4ec1\" data-block-id=\"b4a4ec1\"><div class=\"stk-block-icon-list-item__content\"><span class=\"stk--svg-wrapper\"><div class=\"stk--inner-svg\"><svg aria-hidden=\"true\" width=\"32\" height=\"32\"><use xlink:href=\"#stk-icon-list__icon-svg-def-f2f4755\"><\/use><\/svg><\/div><\/span><span class=\"stk-block-icon-list-item__text\">Get complimentary consultation via a short online meeting and obtain some information about the background of your companies.<\/span><\/div><\/li>\n\n\n\n<li class=\"wp-block-stackable-icon-list-item stk-block-icon-list-item stk-block stk-3fa0aae\" data-block-id=\"3fa0aae\"><div class=\"stk-block-icon-list-item__content\"><span class=\"stk--svg-wrapper\"><div class=\"stk--inner-svg\"><svg aria-hidden=\"true\" width=\"32\" height=\"32\"><use xlink:href=\"#stk-icon-list__icon-svg-def-f2f4755\"><\/use><\/svg><\/div><\/span><span class=\"stk-block-icon-list-item__text\">We study the information and some documentation provided.<\/span><\/div><\/li>\n\n\n\n<li class=\"wp-block-stackable-icon-list-item stk-block-icon-list-item stk-block stk-b3b149d\" data-block-id=\"b3b149d\"><div class=\"stk-block-icon-list-item__content\"><span class=\"stk--svg-wrapper\"><div class=\"stk--inner-svg\"><svg aria-hidden=\"true\" width=\"32\" height=\"32\"><use xlink:href=\"#stk-icon-list__icon-svg-def-f2f4755\"><\/use><\/svg><\/div><\/span><span class=\"stk-block-icon-list-item__text\">We will provide our proposal for a simple plan to help you get ready for transfer pricing compliance. It is your option to execute the plan by yourself, or you may outsource it to us.<\/span><\/div><\/li>\n\n\n\n<li class=\"wp-block-stackable-icon-list-item stk-block-icon-list-item stk-block stk-d847b34\" data-block-id=\"d847b34\"><div class=\"stk-block-icon-list-item__content\"><span class=\"stk--svg-wrapper\"><div class=\"stk--inner-svg\"><svg aria-hidden=\"true\" width=\"32\" height=\"32\"><use xlink:href=\"#stk-icon-list__icon-svg-def-f2f4755\"><\/use><\/svg><\/div><\/span><span class=\"stk-block-icon-list-item__text\">Plan execution and monitoring process.<\/span><\/div><\/li>\n<\/ul><\/div><\/div>\n\n\n\n<div class=\"wp-block-stackable-button-group stk-block-button-group stk-block stk-44cd2d6\" data-block-id=\"44cd2d6\"><div class=\"stk-row stk-inner-blocks stk-block-content stk-button-group\">\n<div class=\"wp-block-stackable-button stk-block-button has-text-align-center stk-block stk-8306f60\" data-block-id=\"8306f60\"><style>.stk-8306f60 .stk-button{padding-right:24px !important;padding-left:24px !important;background:var(--theme-palette-color-2, #0054a6) !important;border-radius:50px !important;}.stk-8306f60 .stk-button:before{border-color:var(--theme-palette-color-2, #0054a6) !important;}.stk-8306f60 .stk-button .stk--inner-svg svg:last-child, .stk-8306f60 .stk-button .stk--inner-svg svg:last-child :is(g, path, rect, polygon, ellipse){fill:var(--theme-palette-color-2, #0054a6) !important;}<\/style><a class=\"stk-link stk-button stk--hover-effect-darken\" href=\"https:\/\/chengco.com.my\/wp\/taxation-services-in-malaysia-2\/transfer-pricing-malaysia\/\"><span class=\"has-stk-global-color-41660-color stk-button__inner-text\">Start Prepare Your Transfer Pricing Documentation<\/span><\/a><\/div>\n<\/div><\/div>\n\n\n\n<div class=\"wp-block-stackable-spacer stk-block-spacer stk--no-padding stk-block stk-2892389\" data-block-id=\"2892389\"><\/div>\n<\/div><\/div><\/div>\n<\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Transfer Pricing for SMEs in Malaysia: Frequently Asked Quesion (FAQ) We understand the pressures faced by SMEs when it comes to compliance with the Transfer Pricing Documentation. Common questions or beliefs floating around their mind would be: My companies do not have holding companies The scope and definition of the related party in the Transfer [&hellip;]<\/p>\n","protected":false},"author":64,"featured_media":33139,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"off","_et_pb_old_content":"","_et_gb_content_width":"","_eb_attr":"","content-type":"","footnotes":""},"categories":[122,1866],"tags":[],"class_list":["post-21158","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tax","category-transfer-pricing"],"blocksy_meta":{"has_hero_section":"disabled","styles_descriptor":{"styles":{"desktop":"","tablet":"","mobile":""},"google_fonts":[],"version":8}},"_links":{"self":[{"href":"https:\/\/chengco.com.my\/wp\/wp-json\/wp\/v2\/posts\/21158","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/chengco.com.my\/wp\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/chengco.com.my\/wp\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/chengco.com.my\/wp\/wp-json\/wp\/v2\/users\/64"}],"replies":[{"embeddable":true,"href":"https:\/\/chengco.com.my\/wp\/wp-json\/wp\/v2\/comments?post=21158"}],"version-history":[{"count":1,"href":"https:\/\/chengco.com.my\/wp\/wp-json\/wp\/v2\/posts\/21158\/revisions"}],"predecessor-version":[{"id":34625,"href":"https:\/\/chengco.com.my\/wp\/wp-json\/wp\/v2\/posts\/21158\/revisions\/34625"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/chengco.com.my\/wp\/wp-json\/wp\/v2\/media\/33139"}],"wp:attachment":[{"href":"https:\/\/chengco.com.my\/wp\/wp-json\/wp\/v2\/media?parent=21158"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/chengco.com.my\/wp\/wp-json\/wp\/v2\/categories?post=21158"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/chengco.com.my\/wp\/wp-json\/wp\/v2\/tags?post=21158"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}